I\'m looking at question EM-7 in the second edition of Intermediate Accounting by Wahlen&Jones. We\'re using the tables to calculate the answers, not the formula. I\'m unsure what the value of n would be for each subquestion. I understand that overall the n=5. \"Samuel David wants to make 5 equal annual withdrawls of $8,000 from a fund that will earn interest at 10% compounded annually. 1. How much would Samuel have to invest on Jan 1, 2016 if the first withdrawl is made on Jan 1, 2017? 2. How much would Samuel invest on Jan 1, 2016 if the first withdrawl is made on Jan 1, 2016?\" Solution this question is trying to probe the understanding of beginning of the period cash flows and end of the period cash flows since you are using table and not formula I will try to explain in words. in both cases n will be 5. however you will have different tables for beginning of period and end of period cas flows. question 1 will use end of period table values question 2 will use beginning of period table values .

1. I'm looking at question EM-7 in the second edition of Intermediate Accounting by
Wahlen&Jones. We're using the tables to calculate the answers, not the formula. I'm unsure
what the value of n would be for each subquestion. I understand that overall the n=5.
"Samuel David wants to make 5 equal annual withdrawls of $8,000 from a fund that will earn
interest at 10% compounded annually.
1. How much would Samuel have to invest on Jan 1, 2016 if the first withdrawl is made on Jan 1,
2017?
2. How much would Samuel invest on Jan 1, 2016 if the first withdrawl is made on Jan 1,
2016?"
Solution
this question is trying to probe the understanding of beginning of the period cash flows and end
of the period cash flows
since you are using table and not formula I will try to explain in words.
in both cases n will be 5.
however you will have different tables for beginning of period and end of period cas flows.
question 1 will use end of period table values
question 2 will use beginning of period table values