At time t = 0, Paul deposits P into a fund crediting interest at an effective annual interest rate…

At time t = 0, Paul deposits P into a fund crediting interest at an effective annual interest rate…

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At time t = 0, Paul deposits P into a
fund crediting interest at an
effective annual interest rate of
7.8%. At the end of each year in
years 9 through 24, Paul withdraws
an amount sufficient to purchase an
annuity-due of 110 per month for 7
years at a nominal interest rate of
6.6% compounded monthly.
Immediately after the withdrawal at
the end of year 24, the fund value is
zero.
Calculate P. [3.a-c #04]

Expert Answer:

Answer rating: 100% (QA)

The effective annual interest rate of the fund is 7 8 so the month
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