Explore BrainMass

Explore BrainMass

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

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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 If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in this order: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.

    d) need more information.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:19 pm ad1c9bdddf
    https://brainmass.com/business/annuity/ali-shah-sets-aside-2-000-each-year-for-5-years-177047

    Solution Preview

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 If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use ...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solution is comprised of a detailed explanation to answer if Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in the following order.

    $2.19

    ADVERTISEMENT