What is the amount of 10 equal annual deposits that can provide five annual withdrawals when a first withdrawal of $5,000 is made at the end of year 11 and subsequent withdrawals increase at the rate of 8% per year over the previous years withdrawals if t

The problem can be solved using the formula for the present value of an annuity, which calculates the total amount that needs to be deposited over the 10-year period to provide the required withdrawals. Using the given information, we can break down the problem into two parts: 1. Calculating the value of the first withdrawal at the end of year 11, which will be used as the basis for subsequent withdrawals. Using compound interest formula: FV = PV (1+r)^n FV = $5,000 PV = ? r = 9% n = 10 years $5,000 = PV (1+0.09)^10 PV = $2,224.49 Therefore, the first withdrawal of $5,000 will be based on an investment of $2,224.49 at the end of year 10. 2. Calculating the total amount of annual deposits needed to provide the required withdrawals over the remaining 5-year period. Using the formula for present value of an annuity: PV = PMT x [(1 - (1 + r)^-n) / r] PV = $2,224.49 PMT = ? r = 9% n = 5 years $2,224.49 = PMT x [(1 - (1 + 0.09)^-5) / 0.09] PMT = $662.58 Therefore, 10 equal annual deposits of $662.58 will be needed to provide the required withdrawals.