Your goal is to be able to withdraw $10,000 for each of the next nine years beginning one year from today and also to withdraw $50,000 ten years from today. The return on the investment is expected to be 6%. The amount that needs to be invested today is closest to:
A)$68,017.
B)$95,937.
C)$78,176.
D)$132,075.

Question

Quizplus · Accepted Answer

To find the present value of the withdrawals, calculate the present value of the annuity of $10,000 for 9 years and the present value of the $50,000 lump sum in year 10, both discounted at 6%. The sum of these present values is closest to $95,937.

Your Goal Is to Be Able to Withdraw $10,000 for Each