What Amount Would You Have to Invest Now at 7

question 53

Multiple Choice

What amount would you have to invest now at 7% compounded annually in order to make withdrawals of $20,000 once per year for 25 years? The first withdrawal is to be made one year from now.

• A) $233,072
• B) $1,264,981
• C) $544,343
• D) $197,226
• E) $427,561

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Definitions:

Contractual Relationship

A legally binding agreement between two or more parties that outlines the terms and conditions of their engagement.

Illegal

Prohibited by law or statute, making the action or activity unlawful.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes, subject to varying levels of legal restriction.

Void From The Outset

A legal term referring to agreements or contracts that are considered invalid and without effect from the moment they are created.