You want to be able to withdraw the specified amount periodically from a payout annuity with the given terms. Find how much the

Question

3 years ago

6

You want to be able to withdraw the specified amount periodically from a payout annuity with the given terms. Find how much the

account needs to hold to make this possible. Round your answer to the nearest dollar. Regular withdrawal: $1200 Interest rate: 2.5% Frequency monthly Time: 26 years
what is the account balance?

Mathematics

2 answers:

fgiga [73] · Answer 1 · 2022-03-27T07:51:15+03:00

9514 1404 393

Answer:

$275,098.25

Step-by-step explanation:

The principal amount can be found using the annuity formula.

A = P(r/12)/(1 - (1 +r/12)^(-12t))

where A is the monthly payment, P is the principal amount, r is the annual interest rate, and t is the number of years.

Solving for P, we have ...

P = A(12/r)(1 -(1 +r/12)^(-12t)) = 1200(12/0.025)(1 -(1 +.025/12)^(-12·26))

= $275,098.25

The account balance needs to be $275,098.25.

jekas [21] · Answer 2 · 2022-03-27T05:22:22+03:00

jekas [21]3 years ago

4 0

Step-by-step explanation:

principal=?. interest=$1200. rate =2. 5%. time=26 NOW, principal=I×100/T×R= $1200×100/26×2. 5=1846. 15