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Problem:

Your grandmother just died and left you $132,500 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account?

A. $37,769.20

B. $39,221.86

C. $37,406.03

D. $33,774.38

E. $36,316.54

Explain in detail and also show all workings.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91147209

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