CH6 Que 4. 1000 points value ning three months from now, you want to be able to

Question

CH6 Que 4. 1000 points value ning three months from now, you want to be able to withdraw $3,500 each quarter from your bank account to cover college expenses over the next five years. If the account pays 0.57 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next five years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g. 32.16)) PVA Reteren ceseBook & Resources Worksheet Difficuity: Basic

Explanation / Answer

Present value of annuity= P* [ [1- (1+r)-n ]/r ] P= Periodic payment 3500 r= Rate of interest per period 0.57% n= number of perioda: Number of years 5 Periods per year 4 number of periods 20 Present value of annuity= 3500* [ (1- (1+0.0057)^-20)/0.0057 ] Present value of annuity= 65,980.03

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