document.write( "Question 1185512: How much money must you invest today in order to withdraw 1, 000 pesos per year for 10 years if interest rate is 12%? \n" ); document.write( "

Algebra.Com's Answer #816356 by ikleyn(52778) $\"\"$ $\"About$

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\n" ); document.write( "How much money must you invest today in order to withdraw 1,000 pesos per year $\"highlight%28at_the_beginnin_of_each_year%29\"$ for 10 years
\n" ); document.write( "if interest rate is 12% $\"highlight%28compounded_annually%29\"$ ?
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document.write( "Use the general formula  A = .\r\n" );
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document.write( "In this formula,  A is the deposited value (the unkown value in this problem);  \r\n" );
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document.write( "                  W  is the withdrawal annual rate W (1000 pesos per year at the biginning of each year);  \r\n" );
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document.write( "                  the annual compounding rate is  r = 0.12;  p = 1 + r = 1 + 0.12 = 1.12;   \r\n" );
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document.write( "                  n is the number of payment periods  n= 10  (10 years) \r\n" );
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document.write( "From the formula\r\n" );
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document.write( "          A =  =  = 6328.25  pesoss.         ANSWER\r\n" );
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document.write( "Notice that the TOTAL amount obtained from the account (1000 each year during 10 years) is  1000*10 = 10000 pesoss.\r\n" );
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document.write( "The difference  P10000 - P6328.25 = $3671.75  is the INTEREST earned by the account during 10 years.   \r\n" );
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document.write( "ANSWER.  The amount of money to be invested today is P6328.25.\r\n" );
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\n" ); document.write( "\n" ); document.write( "See my lessons in this site associated with annuity saving plans and retirement plans \r
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\n" ); document.write( "\n" ); document.write( "    - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( "    - Annuity Due saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( "    - Solved problems on Ordinary Annuity saving plans \r
\n" ); document.write( "\n" ); document.write( "    - Withdrawing a certain amount of money periodically from a compounded saving account (*)\r
\n" ); document.write( "\n" ); document.write( "    - Miscellaneous problems on retirement plans \r
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\n" ); document.write( "\n" ); document.write( "and especially lesson marked (*) in the list as the most relevant to the given problem.\r
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