+598 Thomas is planning to withdraw $ 8000 from a savings account at the end of each quarter for four years. If the payments are deferred for five years and interest is 5.34% compounded semi- annually, what amount has to be invested now into the savings account?
Any help with steps would be greatly appreciated. Thanks
Thomas is planning to withdraw $ 8000 from a savings account at the end of each quarter for four years. If the payments are deferred for five years and interest is 5.34% compounded semi- annually, what amount has to be invested now into the savings account?
Any help with steps would be greatly appreciated. Thanks
This is very similar to Mrs. Bell's problem:
Thomas must invest today into his savings account: $88,092.69. You project this amount 5 years into the future which will come to:$114,650.38. This will enable Thomas to withdraw $8,000 each quarter for 4 years.
The formulae used here are exactly the same as the ones given in Mrs. Bell's problem.
