Answer to Question #341180 in Financial Math for Orifha

Question

4 points

A woman wishes to deposit a lump sum into a savings account now from which she can withdraw regular amounts to pay for the maintenance of hel

need to withdraw regular half-yearly amounts from the savings account starting with a withdrawal of R1500 eighteen months from now from now an

withdrawal five years from now. To keep up with inflation the withdrawals will need to increase at a rate of 6% p.a each half-year from the second wi

the savings account earns interest at a rate 6,8% p.a.compounded daily, then the amount, to the nearest cent, that must be deposited into the saving

to fund the future growing withdrawals, is equal to:

(Hint: Think carefully about where the Pv and Fv of the withdrawals is situated on the time line!)

Answer 1

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