A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of retirement, you will have $

Question

2 years ago

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A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of retirement, you will have $

31,360 to your credit in the plan. The plan anticipates earning 8% interest annually over the period you receive benefits. How much will your annual benefits be, assuming the first payment occurs one year from your retirement date?

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1 answer:

Annette [7] · Answer 1 · 2022-09-11T07:35:10+03:00

Answer:

Annual benefit = $3194

Explanation:

Given data:

Period of annuity = 20 years

Total Amount of money at retirement time = $31,360

Rate of interest = 8%

annual benefit can be obtained b using given formula:

annual benefit $= \frac{total\ amount}{PV\ factor}$

PV factor for given 8% rate for 20 year is 9.8181

Annual benefit = $\frac{31,360}{9.8181} = $3194$

A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of​ retirement, you will have​ $

A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of retirement, you will have $