Future and present value of an annuity a small business, Ask an Expert

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Future and Present Value of an Annuity. A small business owner contributes $1000 at the end of each month into an account that earns an annual rate of 5% compounded monthly. a. How much is in the account (its future value) after 5 years? b. How much would the business owner need to contribute each month if she wanted the value in 5 years to be $100,000? c. Suppose she currently has an account valued at $200,000 (its current value) which is also growing an annual rate of 5% compounded monthly. How much can she withdraw monthly (in equal amounts) from this current account if she wants to deplete the account at the end of 5 years. d. How much would she need to add to this second account if she wanted to withdraw $2000 each month for 5 years?

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Category:- Financial Management
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