Question

Suppose that for retirement purposes, over the course of 27 years, you make monthly deposits of...

Suppose that for retirement purposes, over the course of 27 years, you make monthly deposits of $470.00$470.00 into an ordinary annuity that pays an annual interest rate of 5.393%5.393% compounded monthly. After those 27 years, you then want to make monthly withdrawals for 28 years, reducing the balance in the account to zero dollars.

a) Find the amount of money you have accumulated in the annuity over the first 27 years:

b) How much should you withdrawing monthly from your account so that the balance reaches zero dollars after the final 28 years?

Homework Answers

Answer #1

find the future value first

PMT=470

t=27 years

r=5.393% = 0.05393

n=12 for monthly compound

........................(1)

.

.

.

.

now our present value is

PV=342528

PMT=monthly withdrawals =?

t=28 years

r=5.393% = 0.05393

n=12 for monthly compound

....................monthly withdrawals for 28 years,

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that for retirement purposes, over the course of 20 years, you make monthly deposits of...
Suppose that for retirement purposes, over the course of 20 years, you make monthly deposits of $350.00$350.00 into an ordinary annuity that pays an annual interest rate of 7.898%7.898% compounded monthly. After those 20 years, you then want to make monthly withdrawals for 22 years, reducing the balance in the account to zero dollars. a) Find the amount of money you have accumulated in the annuity over the first 20 years: b) How much should you withdrawing monthly from your...
A person wants to establish an annuity for retirement purposes. They want to make semiannual deposits...
A person wants to establish an annuity for retirement purposes. They want to make semiannual deposits for 15 years so that they can then make semiannual withdrawals of $5000 for 25years. The annuity earns 7.32% interest compounded semiannually. (a) How much will have to be in the account at the time they retire? (b) How much should be deposited each semiannual period for 15 years in order to accumulate the required amount? (c) What is the total amount of interest...
Maggie wants to establish an annuity for retirement purposes. She wants to make quarterly deposits for...
Maggie wants to establish an annuity for retirement purposes. She wants to make quarterly deposits for 20 years so that she can then make quarterly withdrawals of $5,000 for 10 years. The annuity earns 7.32% compounded quarterly. (A) How much will have to be in the account at the time she retires? (B) How much should be deposited each quarter for 20 years in order to accumulate the required amount? (C) What is the total amount of interest earned during...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. (Note: you make 361 total monthly deposits into your retirement account.) You will begin to make withdrawals from the account the first month after you retire. If you plan to live an addition 25 years...
You are planning to make monthly deposits of $190 into a retirement account that pays 7...
You are planning to make monthly deposits of $190 into a retirement account that pays 7 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 20 years?
You are planning to make monthly deposits of $50 into a retirement account that pays 10...
You are planning to make monthly deposits of $50 into a retirement account that pays 10 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 18 years? Multiple Choice $31,529.57 $360,337.93 $30,028.16 $27,359.50 $28,526.75
You just decided to begin saving for retirement. You will make deposits of $1,000 per month...
You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. The day you retire you will buy an RV for $240,000. You will begin to make withdrawals from the account the first month after you retire. If you plan to live an addition 25 years,...
1. For the next 6 years, you pan to make equal quarterly deposits of $600.00 into...
1. For the next 6 years, you pan to make equal quarterly deposits of $600.00 into an account paying 8% compounded quarterly. How much will be the total you have at the end of the time? 2. How much money will you have to deposit now if you wish to have $5,000 at the end of 8 years. Interest is to be at the rate of 6% compounded semiannually? 3. In the California “Million Dollar Lottery” a winner is paid...
You are planning to make annual deposits of $5,700 into a retirement account that pays 10...
You are planning to make annual deposits of $5,700 into a retirement account that pays 10 percent interest compounded monthly. How large will your account balance be in 30 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You are planning to make annual deposits of $6,090 into a retirement account that pays 9...
You are planning to make annual deposits of $6,090 into a retirement account that pays 9 percent interest compounded monthly. How large will your account balance be in 30 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT