Question

Recent sales of some real estate and record profits make it possible for a manufacturer to set aside $1,100,000 in a fund to be used for modernization and remodeling. How much can be withdrawn from this fund at the beginning of each half-year for the next 5 years if the fund earns 6.4%, compounded semiannually

Answer 1

$130,273.20

Step-by-step explanation:

The amount that can be drawn from this fund (PMT) is calculated as follows:

PV = $1,100,000

i = 6.4%

N = 5 × 2 = 10

P/Yr = 2

FV = $0

PMT = ?

Using a financial calculator to enter the values as above, the amount that can be drawn from this fund is $130,273.20