Need help with this thanks. I don’t understand how the answer was gotten.
Calculator: Texas BA II Plus
Mode: END (Ordinary Annuity)
Step 1) Compute the PV of the withdrawals & ending balance at Year 14
N = 20
I/Y = 7
PMT = 50,000 (Withdrawal amount)
FV = 100,000 (Remaining balance in the account at the end)
[CPT] [PV] -555,542.6126 (PV at the end of Year 14, as this is based on END mode)
Then, discount the amount to T = 0
\frac{555,542.6126}{1.07^{14}} = 215,449
=============================
ALTERNATIVE:
[CF]
CFo = 0
C01 = 0
F01 = 14
C02 = 50,000 (withdrawal for 19 times)
F02 = 19
C03 = 150,000 (last withdrawal + ending amount)
F03 = 1
[NPV] I = 7
[CPT] 215,449
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Thank you so much.
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