Art Newner wants to know how much he will have to invest today in order to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He will make all his withdrawals at the end of each year. How much should Art invest?
What will be an ideal response?
$19,895.20
Table 13-2, Interest = 10% / 1 = 10%, Periods = 3 × 1 = 3; $8,000 × 2.4869 = $19,895.20.
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