Question

# You will need to withdraw the following amounts of money in the next several years: Beginning...

You will need to withdraw the following amounts of money in the next several years:

Beginning of year 1 (or today): \$6,000
Beginning of years 2~4: \$10,000
Beginning of the following year: \$13,000

These amounts of money will be withdrawn from your checking account that pays you a 4.6% interest rate every year. How much should your parents deposit into your account today, so that it's just enough for you to make the required money withdrawals?

(Increase decimal places for any intermediate calculations, from the default 2 to, for example, 6 or even higher. The more the better! Only round your final answer to TWO decimal places: for example, 1,000.23. Do NOT use "\$" in your answer.)

The amount of withdrawal at the beginning of

Year 1 \$6000

Year 2 \$10000

Year 3 \$10000

Year 4 \$10000

Year 5 \$13000

As 4.6% p.a. interest is there, we have to calculate the present value of these future withdrawals so that it is equal to the present value of deposit which is made today.

 Year Amount Withdrawn Present Value @ 4.6% Present Value of Amount Withdrawn 1 6000 1.00000000 6000.00000000 2 10000 0.95602294 9560.22944551 3 10000 0.91397987 9139.79870507 4 10000 0.87378573 8737.85727062 5 13000 0.83535920 10859.66964800 Deposit in Account Today 44297.55506921

Amount to be deposited today so that it's just enough to make required withdrawal = 44297.56

Feel free to ask any query.

Please upvote if you like it.

Thank You!

#### Earn Coins

Coins can be redeemed for fabulous gifts.