MrA Deposits $5000 Today in a Fund Earning Interest at J₂

question 26

Multiple Choice

Mr.A deposits $5000 today in a fund earning interest at j₂ = 6%.He wishes to withdraw $490 every 6 months for as long as possible.He will make his first withdrawal exactly 2 years from today.When will he make the final smaller concluding (drop) withdrawal?

• A)End of 6.5 years
• B)End of 7 years
• C)End of 8.5 years
• D)End of 9 years

---

Definitions:

Dividend Payable

The amount of money a company is committed to paying its shareholders in dividends for owning the company's stock.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value remains the same.

Market Value

The present rate at which a company or asset is available for purchase or sale on the market.