You Are Going to Withdraw $1,000 at the End of Each

question 373

Multiple Choice

You are going to withdraw $1,000 at the end of each year for the next three years from an account that pays interest at a rate of 8% compounded annually. The account balance will reduce to zero when the last withdrawal is made. How much interest will you earn on the account over the three year life?

• A) $70.00
• B) $240.00
• C) $422.90
• D) $576.24
• E) $3,000.00

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