## Related questions with answers

**(a) decide whether the problem relates to an ordinary annuity or an annuity due and then (b) solve the problem.**

Recent sales of some real estate and record profits make it possible for a manufacturer to set aside $\$ 800,000$ in a fund to be used for modernization and remodeling. How much can be withdrawn from this fund at the beginning of each half-year for the next $3$ years if the fund earns $7.7 \%$ compounded semiannually?

Solutions

VerifiedIn this exercise, the task is to determine whether the example describes the ordinary annuity or annuity due and then to determine what is needed, considering the given input data.

**(a)**
Given that the funds can be withdrawn at the beginning of each half-year, we can infer that this investment situation is an annuity due.

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