You want to be able to withdraw $25,000 each year for 30 years. Your account earns 8% interest. a) How much do you need in your account at the beginning? $ b) How much total money will you pull out of the account? $ c) How much of that money is interest?

You want to be able to withdraw $25,000 each year for 30 years. Your account earns 8% interest. a) How much do you need in your account at the beginning? $ b) How much total money will you pull out of the account? $ c) How much of that money is interest?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Question

You want to be able to withdraw $25,000 each year for 30 years. Your account earns 8% interest.

a) How much do you need in your account at the beginning?

$

b) How much total money will you pull out of the account?

$

c) How much of that money is interest?

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Step 2: Answer to part a. Computation of amount in account at the beginning.

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Step 3: Answer to part b. Computation of total money pulled out of account.

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Step 4: Answer to part c. Computation of interest amount.

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