Question

A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of​ retirement, you will have​ $31,360 to your credit in the plan. The plan anticipates earning​ 8% interest annually over the period you receive benefits. How much will your annual benefits​ be, assuming the first payment occurs one year from your retirement​ date?

Answer 1

Annual benefit = $3194

Step-by-step explanation:

Answer 2

Annual benefit = $3194

Step-by-step explanation:

Given data:

Period of annuity = 20 years

Total Amount of money at retirement time = $31,360

Rate of interest = 8%

annual benefit can be obtained b using given formula:

annual benefit
`= (total\ amount)/(PV\ factor)`

PV factor for given 8% rate for 20 year is 9.8181

Annual benefit =
`(31,360)/(9.8181) = $3194`