A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?

A child age 3 is given $20,000. The amount is put into savings account which pays 4% compounded annually. If the child takes the money out in eight equal annual payments with the first in 15 years, what is the size of each withdrawal?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 4MC: Refer to the present value table information on the previous page. What amount should Brett have in...

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Question

A child age 3 is given $20,000. The amount is put into
savings account which pays 4% compounded
annually. If the child takes the money out in eight
equal annual payments with the first in 15 years,
what is the size of each withdrawal?
$34,633.53
$5144.04
$297.06
$5349.80
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