(Ignore income taxes in this problem.)You have deposited $24,764 in a special account that has a guaranteed rate of return.If you withdraw $4,300 at the end of each year for 9 years,you will completely exhaust the balance in the account.The guaranteed rate of return is closest to:
A) 6%
B) 10%
C) 17%
D) 56%

Question

Quizplus · Accepted Answer

$24,764 = $4,300 × Present value of an annuity for 9 years at X%
Present value of an annuity for 9 years at X% = $24,764 ÷ $4,300 = 5.759
This present value factor corresponds to a rate of return of 10%.

(Ignore Income Taxes in This Problem