You will deposit $2,000 today. It will grow for five years at 12% interest, but compounded semiannually. You will then withdraw the funds annually over the next four years at the end of each year, with an annual interest rate of 8%. Your annual withdrawal will be approximately ________.
A) $2,340
B) $4,332
C) $797
D) $1,082

Question

Quizplus · Accepted Answer

FV = PV × FV_IF(App. A: 6%, 10 periods) = $2,000 × 1.791 = $3,582 A = PV_A (App. D: 8%, 4 periods) PV_IFA= $3,582/3.312 = $1,082

You Will Deposit $2,000 Today