Problem
Sandstone Corporation wants to withdraw $100,000 from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%?
11% Interest Table Factors
|
Period
|
Present Value of $1 (Table 6-2)
|
Present Value of an Ordinary Annuity of $1 (Table 6-4)
|
|
6
|
.53464
|
4.23054
|
|
7
|
.48166
|
4.71220
|
|
8
|
.43393
|
5.14612
|
|
9
|
.39092
|
5.53705
|
|
10
|
.35218
|
5.88923
|