Answer:
It will provide an amount of $13,259
Explanation:
According to the given data we have the following:
present value of deferred annuity=$131,000
i=0.061/2=0.0305
n=20*2=40
k=14*2=28
Therefore, to calculate how much will it provide at the end of each half year (in dollars) for the next 20 years after they retire we would have to calculate the following formula:
$131,000=R(1-(1+0.0305)∧-40/0.0305)*(1+0.0305)∧-28
$131,000=R(1-(1.0305)∧-40/0.0305)* (1.0305)∧-28
$131,000=R(1-0.3006/0.0305)* 0.4311
$131,000=R(22.93)*(0.4311)
R=$131,000/9.88
R=$13,259
It will provide an amount of $13,259
