John wishes to set up an account for his grandfather so that he can have some extra money each month. John wants his grandfather to be able to withdraw $110.00 per month for the next 2 years. How much must John invest today at 7% per year compounded monthly so that his grandfather can withdraw $110.00 per month for the next 2 years?
I am unsure of the formula to use for this problem. Is this a present annuity problem? If so, how do I work it?
Thanks in advance!