Uncle Elcnu left you a nice sum of money. You plan to use it for the next 10 years and make annual withdrawals, which will increase by 5 percent a year. Specifically, you will withdraw $40,000 at the end of the first year, $42,000 at the end of the second year, and so forth. Your cost of capital is 6 percent a year. Using this information, how much did Uncle Elcnu leave you?

Answer rating: 100% (QA)

To determine how much Uncle Elcnu left you we can use the concept of present value of an annuity for... View the full answer