Question

John is planning to go to graduate school in a program that will take three years. john wants to have available $10,000 available each year for his school and living expenses. if he earns 6% on his investments, how much must be deposited at the start of his studies for him to withdraw $10,000 a year for three years?

Answer 1

$26,730

(PV of the annuity. Input: 3 N; 6 I/Y; 10000 PMT; 0 FV; CPT PV.)

Step-by-step explanation:

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Answer 2

Note: John needs to have A LOT of money to start out.

Alright, if 6% = $10,000 in the ideal situation, then we need to find the money he starts with. Do you know if this is compound interest, or simple interest?