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zhenek [66]
3 years ago
12

Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits an

d compounding at the same intervals as deposits. Round your answer to the nearest cent.) $30,000 in a fund paying 2% per year, with monthly payments for 10 years
Business
1 answer:
ikadub [295]3 years ago
3 0

Answer:

$ 226.04

Explanation:

Given:

Paying fund, FV = $ 30000

Interest rate, i = 2%

Time, t = 10 years

Now,

\textup{PMT}=\textup{FV}[\frac{i}{(1+i)^n-1}]

since, the payment is made monthly

thus,

n = 10 × 12 = 120 months

i = 2% / 12 = 0.02 / 12

on substituting the values in the above equation, we get

PMT={30000}[\frac{\frac{0.02}{12}}{(1+{\frac{0.02}{12}})^{120}-1}]

or

PMT = $ 226.04

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