Question

Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana’s monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent.

Answer 1

a.

$2,024.02

Explanation:

Answer 2

Amount that Ana got from IRA in last 15 years per month= $ 230.32

Total money saved = $ 230.32 × 15 × 12

= $ 230.32 × 180

= $ 41457.60

Compound Interest on the Principal of $ 41457.60 at the rate of 2.3 %monthly

Amount = Principal
`[1 + (R)/(100)]^1`

=
`41457.60[1+(2.3)/(100)]^1 \\\\ = 42411.1248`$

Money received as a pension= $ 1562.32

She wants to divide $ 42411.1248 as a primary source of income for the next 10 years.

Amount received from IRA as an income if she divides whole income of $ 42411.1248 into 120 parts (10 years= 12 ×10= 120 months) =
`(42411.1248)/(120)=353.426`$

Total money received as an income per month by Ana= $ 353.426 + $ 1562.32= $ 1915.746

=$ 1915.75(Approx)