What Amount Should an Individual Have in a 10% Bank

question 49

Multiple Choice

What amount should an individual have in a 10% bank account today before withdrawal if €5,000 is needed each year for four years with the first withdrawal to be made today and each subsequent withdrawal at one-year intervals? (The balance in the bank account should be zero after the fourth withdrawal.)

• A) €5,000 + (€5,000 × 0.909) + (€5,000 × 0.826) + (€5,000 × 0.751)
• B) €5,000 ÷ 0.683 × 4
• C) (€5,000 × 0.909) + (€5,000 × 0.826) + (€5,000 × 0.751) + (€5,000 × 0.683)
• D) €5,000 ÷ 0.909 × 4

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