document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1071791>Question 1071791</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help!\r<BR>\n" );
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document.write( "Find the present value PV of the annuity necessary to fund withdrawals of $100 per month for 20 years, if the annuity earns 2% per year (assume monthly compounding). \r<BR>\n" );
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document.write( "Thank you  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #686725 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=686725\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> you will be withdrawing 200 per month for 20 years.\r<BR>\n" );
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document.write( "your annuity is earning you 2% per year compounded monthly.\r<BR>\n" );
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document.write( "you are withdrawing the money at the end of each month.\r<BR>\n" );
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document.write( "the following online calculator shows you how to do it.\r<BR>\n" );
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document.write( "the calculator can be found at <a  rel=nofollow HREF= \"http://arachnoid.com/finance/\" target = \"_blank\">http://arachnoid.com/finance/</a>\r<BR>\n" );
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document.write( "you would enter:<BR>\n" );
document.write( "present value = 0<BR>\n" );
document.write( "future value = 0<BR>\n" );
document.write( "paymnt = 200<BR>\n" );
document.write( "interest rate percent = 2/12 = .1666667 per month<BR>\n" );
document.write( "number of months = 12 * 20 = 240<BR>\n" );
document.write( "you would select payment at end of time period.<BR>\n" );
document.write( "you would click on pv and you would get pv = 39,534.79 as shown in the following picture.<BR>\n" );
document.write( "disregard the sign.<BR>\n" );
document.write( "it has to do with cash flows in or out.<BR>\n" );
document.write( "the pv is a cash flow out because you take your money and put it into the annuity fund.<BR>\n" );
document.write( "the payment is positive because you are receiving money from the annuity fund.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2017/030702.jpg\" alt=\"$$$\" </>\r<BR>\n" );
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document.write( "a key point is that you need to determine the interest rate per time period and the number time periods.\r<BR>\n" );
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document.write( "your time periods are in month because the payments are monthly and the interest rate compounding is monthly.\r<BR>\n" );
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document.write( "you take the annual percentage rate and divide it by 12 to get the interest rate percent per month.\r<BR>\n" );
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document.write( "you take the number of year and multiply them by 12 to get the number of months.\r<BR>\n" );
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document.write( "the calculator does the rest.\r<BR>\n" );
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document.write( "there are formulas involved so that you can do the work manually by using the formula.\r<BR>\n" );
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document.write( "they can be found here:\r<BR>\n" );
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document.write( "<a  rel=nofollow HREF= \"https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes\" target = \"_blank\">https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes</a>\r<BR>\n" );
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document.write( "the formula you would be looking for would be:\r<BR>\n" );
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document.write( "PRESENT VALUE OF AN ANNUITY WITH END OF TIME PERIOD PAYMENTS\r<BR>\n" );
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document.write( "when you are using the formulas, you need the interest rate and not the interest rate percent.\r<BR>\n" );
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document.write( "2% interest rate percent is equal to .02 interest rate.\r<BR>\n" );
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document.write( ".166666667 interest rate percent is equal to .00166666667\r<BR>\n" );
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document.write( " </SPAN>\n" );
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