Please show work, thank you (Ignore income taxes in this problem.) You have depo
ID: 2465993 • Letter: P
Question
Please show work, thank you
(Ignore income taxes in this problem.) You have deposited $13,466 in a special account that has a guaranteed rate of return. If you withdraw $2,000 at the end of each year for 8 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to:
(Ignore income taxes in this problem.) You have deposited $13,466 in a special account that has a guaranteed rate of return. If you withdraw $2,000 at the end of each year for 8 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to:
Explanation / Answer
4% 0.961538 0.924556 0.888996 0.854804 0.821927 Rate of Return 0.790315 0.759918 13466 = 2000* PVAF, 8 years 0.73069 X = 13466/2000 PVAF = 6.733 X = 4% The guaranteed rate of return would be closest to 4%