11.4k views
1 vote
9. You want to be able to withdraw the specified amount periodically from a payout annuity with the given terms. Find how much the account needs to hold to make this possible. Round your answer to the nearest dollar.Regular withdrawal:$4500Interest rate:4.5%FrequencyquarterlyTime:24 yearsAccount balance: $

9. You want to be able to withdraw the specified amount periodically from a payout-example-1
User Sudar
by
8.1k points

1 Answer

4 votes

For P = 4500, r = 0.045 and n = 96, we have:


(P\lbrack1-(1+r)^(-n)\rbrack)/(r)=(4500\lbrack(1-(1+0.045)^(-96))\rbrack)/(0.045)=98538

Therefore, the account needs to hold $98,538 to make this possible.

User Yycking
by
8.0k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories