## What is the amount of 10 equal annual deposits that can provide five annual withdrawals? Assume that each deposit is made at the end of each year. A first withdrawal of $15,000 is made at the end of year 11 and subsequent withdrawals increase at the rate of 8% per year over the previous year’s withdrawal. Determine the amounts from the following rates. 9% and 6%.

EXPERT ANSWER Interest rate of 9% Step1. Calculate the Investment required to fund the five yearly withdrawals. For this calculate the present value of withdrawals at end of year 10. Year Withdrawals growing at 8% PV 9% Calculation 11 $15,000.0 $13,761.5 15000/1.091 12 $16,200.0 $13,635.2 16200/1.092 13 $17,496.0 $13,510.1 17496/1.093 14 $18,895.7 $13,386.2 18895/1.094 15 …