Homework Answers
Present value of withdrawals=cash withdrawals*Present value of discounting factor(rate%,time period)
20000=X/1.08^3+X/1.08^4+X/1.08^5+X/1.08^6+X/1.08^7+30000/1.08^10
20000=X[1/1.08^3+1/1.08^4+........+1/1.08^7]+30000/1.08^10
20000=X*3.423105313+30000*0.463193488
Hence X=(20000-30000*0.463193488)/3.423105313
which is equal to
=$1783.23(Approx).
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