The Solution to This Problem Requires Time Value of Money

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
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Denise wants to help pay for her niece's college tuition.Her niece will begin college in one year.How much would Denise need to put into a savings account today at 6% so that her niece can withdraw $10,000 per year for four years and reduce the account balance to zero at the end of the four years?

A) $31,680
B) $34,650
C) $37,600
D) $37,720