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Harry Rawlings wants to withdraw $10,000 (including principal) from an investment fund at the end of each year for 5 years. How should he compute his required initial investment at the beginning of the
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Harry Rawlings wants to withdraw $10,000 (including principal) from an investment fund at the end of each year for 5 years. How should he compute his required initial investment at the beginning of the first year if the fund earns 6% compounded annually?

User Daman Arora
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1 Answer

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Answer:

$44,651.06

Step-by-step explanation:

We use the Present value function for this question. The calculation is shown in the attached spreadsheet

Data are given in the question

Future value = $0

Rate of interest = 6%

NPER = 5 years

PMT = $25,000

The formula is shown below:

= PV(Rate;NPER;-PMT;FV;type)

After solving this, the present value is $44,651.06

Harry Rawlings wants to withdraw $10,000 (including principal) from an investment-example-1
User Mikelbring
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