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# Ali Shah sets aside 2,000 each year for 5 years.

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Ali Shah sets aside 2,000 each year for 5 years. He then withdraws the funds on an equal annual basis for the next 4 years. If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in this order:

a) present value of an annuity of \$1; future value of an annuity of \$1

b) future value of an annuity of \$1; present value of an annuity of \$1

c) future value of an annuity of \$1; present value of a \$1

d) future value of an annuity of \$1; future value of a \$1

Sharon Smith will receive \$1 million in 50 years. The discount rate is 14. As an alternative, she can receive \$2,000 today. Which should she choose?

a) the \$1 million dollars in 50 years.

b) \$2,000 today.

c) she should be indifferent.

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Ali Shah sets aside 2,000 each year for 5 years. He then withdraws the funds on an equal annual basis for the next 4 years. If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer if Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in the following order.

\$2.49