To create shareholder value via diversification, a company must get into new businesses that are profitable ____ (A) diversify i
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Suppose $250,000 is used to establish an annuity that earns 6%, compounded quarterly, and pays $6000 at the end of each quarter. It will take about 120 quarters until the account balance reaches $0.
Amount invested (Present value) = $250000
Quarterly payment (At the end of each quarter) (P) = $4500
Interest Rate (Quarterly) (r) = 6% /4
= 1.5% = 0.015
A number of quarters (n) = ?
Future value at the end = 0
Present value of Annuity formula:
Present value = P ×
250000 = 4500 ×
250000 = 300000 ×
250000 / 300000 =
0.83333 =
n = 120
Hence is shall take 120 Quarters until the account balance is $0.
To learn more about account balance
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