The Solution to This Problem Requires Time Value of Money

question 97

Multiple Choice

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Mackie's individual retirement account IRA currently has a balance of $100,000 and is earning 6%. Beginning one year from today, what equal annual amounts can be withdrawn from the IRA for 10 years so that the balance after the tenth withdrawal is zero?

• A) $14,237
• B) $13,587
• C) $12,950
• D) $10,000

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