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Homework Statement
Consider an investment of $5,000 at 6% convertible semiannually. How much can be withdrawn
each half−year to use up the fund exactly at the end of 20 years?
Homework Equations
the present value annuity-immediate equation
equation of value relating 5000 to the above equation
The Attempt at a Solution
withdrawal is unknown
5000 = withdrawal * present value of annuity
I have a more urgent question: why can a withdrawal value be multiplied by the present value function when the withdrawal is being taken out? My thinking is the present value function can only be multiplied by deposits because deposits will be affected by interest. This question bothers me more than solving the problem.