posted by Pulling my hair on .
I think that the question is written poorly.
5. Assuming a 6% interest rate, how much would Danielle have to invest now to be able to withdraw $10,000 at the end of each year for the next nine years.
I came up with $166,667 using the compound interest formula assuming that n=12, t=9.
it should be clear that your answer is way off, since only $90,000 is being withdrawn over the life of the investment.
So, less than $90K will have to be invested, since the money in the fund will be earning interest. Check your formula for the present value of an annuity to get the answer.
I got 68016.92