Question

Gwen plans to retire in 3 years with $426,000 in her account, which has an annual return of 6.29 percent. If she receives annual payments of X, with her first payment of X received in 4 years and her last payment of X received in 9 years, then what is X, the amount of each payment? Number Emerson plans to retire in 3 years with $296,000 in his account, which has an annual return of 10.13 percent. If he receives payments of $60,700 per year and he receives his first $60,700 payment in 4 years, then how many payments of $60,700 can Emerson expect to receive? Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00).

Answer 1

Q1. $87,423

Q2. 7.06

Step-by-step explanation:

Q1. Calculation to determine what is X, the amount of each payment

Using Financial calculator to find X

End mode,

N = 6

% = 6.29%

PV= -$426,000

FV = 0

Hence:

X = 87,423

Therefore X, the amount of each payment will be

Q2. Calculation to determine how many payments can Emerson expect to receive

Using Financial calculator

End mode,

%= 10.13%

PV = -$296,000

PMT =$60,700

FV = 0

Hence,

Payment = 7.06

Therefore how many payments can Emerson expect to receive will be 7.06