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Art wants to know how much he'll have to invest today to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He'll make all of his withdrawals at the end of each year. How much should Art invest?

User Rdh
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2 Answers

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He should invest $80,000 if he wants $8,000 at 10% interest. He can withdraw $8,000 at the end of each year. This is because if $8,000 is 10% of what he has in his bank account, to get the full amount (100%), we can multiply by 10, because 10% x 10= 100%. So $8,000 x 10= $80,000.
User Spanishgum
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2 votes

Answer:

Correct 19,895.20

Explanation:

User Msemelman
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