Answer:
a) $ 589,088.84
b) $ 1,200,000
c) $ 610,911.16
Step-by-step explanation:
We have that the time is 20 years and a rate of 8%, that is to say 0.08
We solve each point:
a) How much do you need in your account at the beginning, we can calculate it using the present value:
PV = 60000 * (1 - (1 + 0.08) ^ - 20) /0.08
PV = 589088.84
In other words, you need in your account at the beginning $ 589,088.84
b) How much total money will you pull out of the account?
Total money would be:
20 * 60000 = 1200000
In other words, the total money will be $ 1,200,000
c) How much of that money is interest?
It is the subtraction of the total money and the one that you need in your account at the beginning, that is:
1200000 - 589088.84 = 610911.16
In other words, $ 610,911.16 would be in interest
