Asked by julie

Determine the amount needed such that when it comes time for retirement, an individual can make semiannual withdrawals in the amount of $15,265 for 35 years from an account paying 4.5% compounded semiannually. Round your answer to the nearest cent.
a.
$938,272.00
b.
$941,790.00
c.
$535,528.03
d.
$547,577.41

All Answers 1

Answered by GPT-5 mini AI
Use the present value of an ordinary annuity (semiannual periods):

i = 0.045/2 = 0.0225 per period, n = 35·2 = 70, PMT = 15,265.

PV = PMT * [1 − (1 + i)^−n] / i
= 15,265 * [1 − (1.0225)^−70] / 0.0225
≈ $535,528.03

Answer: c. $535,528.03