Explanation
PV annity table:
20 years × 1 = 20 periods
7% = 7% (Table 13.2)
1
$53,500 × 10.5940 = $566,779.00
PV table:
7 years × 1 = 7 periods
7% = 7% (Table 12.3)
1
$566,779.00 × 0.6227 = $352,933.28
Janet Woo decided to retire to Florida in 7 years. What amount should Janet invest today so she can withdraw $53,500 at the end of each year for 20 years after she retires? Assume Janet can invest money at 7% compounded annually. (Do not round intermediate calculations. Round your answer to the nearest cent.)
1 answer