Joe Hernandez has inherited $25,000 and wishes to purchase an annuity that will provide him with a steady income over the next 1

Question

3 years ago

8

Joe Hernandez has inherited $25,000 and wishes to purchase an annuity that will provide him with a steady income over the next 1

2 years. He has heard that the local bank is currently paying 6% p.A. (compounding annually). If he were to deposit his fund, what is the equal amount would he be able to withdraw at the end of each year for 12 years?

Mathematics

2 answers:

mote1985 [20] · Answer 1 · 2022-02-23T01:11:25+03:00

mote1985 [20]3 years ago

8 0

Answer:

p=2982

Step-by-step explanation:

Rate of interest = 6 % p.a

No of year = 12

P.V = $ 25000

Installments (p) = ?

We know the formula of P.V annuity

P.V = P[ 1-(1+r)-n/r]

25000 = P[1-(1+0.06)-12/0.06]

P = 2982 will withdraw annuity

elena-14-01-66 [18.8K] · Answer 2 · 2022-02-23T03:14:36+03:00

elena-14-01-66 [18.8K]3 years ago

7 0

2 always the same number