Jordan has $6000 to invest in an annuity from which he plans to make regular withdrawals over the next 3 years. he is considering tow options: Option A: Withdrawals are made every quarter and interest is earned at a rate of 8% compounded quarterly. Option B: Withdrawals are made every month and interest is earned at a rate of 7.75%, compounded monthly. (a) Determine the regular withdrawal for each option. (b) Determine the total interest earned for each option.

Jordan has $6000 to invest in an annuity from which he plans to make regular withdrawals over the next 3 years. he is considering tow options: Option A: Withdrawals are made every quarter and interest is earned at a rate of 8% compounded quarterly. Option B: Withdrawals are made every month and interest is earned at a rate of 7.75%, compounded monthly. (a) Determine the regular withdrawal for each option. (b) Determine the total interest earned for each option.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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