Answer:
Option D. $5,840.62
Step-by-step explanation:
Investment: I=$900,000
Period annuity: A
4.8% APR compounded monthly:
APR=4.8%=4.8/100→APR=0.048
Period of 20 years
A=r*I/[1-(1+r)^(-n)]
Rate per period (month): r=APR/12=0.048/12→r=0.004
Number of periods (months): n=12(20)→n=240
Replacing the known values in the formula:
A=0.004*$900,000/[1-(1+0.004)^(-240)]
A=$3,600/[1-(1.004)^(-240)]
A=$3,600/[1-0.383626788]
A=$3,600/[0.616373212]
A=$5,840.617226
A=$5,840.62
