Art wants to know how much he'll have to invest today to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He'll make all of his withdrawals at the end of each year. How much should Art invest?

Question

Mathematics

Hope Valdez

25 August, 00:43

Art wants to know how much he'll have to invest today to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He'll make all of his withdrawals at the end of each year. How much should Art invest?

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Answers (2)

Know the Answer?

Uriah Hawkins · Answer 1

Correct 19,895.20

Karlie Burke · Answer 2

He should invest $80,000 if he wants $8,000 at 10% interest. He can withdraw $8,000 at the end of each year. This is because if $8,000 is 10% of what he has in his bank account, to get the full amount (100%), we can multiply by 10, because 10% x 10 = 100%. So $8,000 x 10 = $80,000.