You invest $1,000,000 today. You would like to earn 6.5 percent ROI each year for four years and recover $250,000 capital each year. Determine the annual amounts of return for each year you need to meet your objectives. You may find the following form helpful:
|
Cash Flow at End of Year |
|||||
|
Year |
Investment Balance at Start of Year |
Total Amount |
Earnings at ?% |
Capital Recovery |
Investment Balance at End of Year |
|
1 |
$100,000 |
|
|
$250,000 |
|
|
2 |
|
|
|
$250,000 |
|
|
3 |
|
|
|
$250,000 |
|
|
4 |
|
|
|
$250,000 |
$0 |