Question

For her daughter's university education, Carla Hackl has invested an inheritance in a fund paying 6.2% compounded quarterly. If ordinary annuity payments of $4250.00 per month are to be made out of the fund for 5 years and the annuity begins 7.75 years from now, how much was the inheritance?

Answer 1

ANS.

Total Value of Annuity = (4250*12*5)

                                = 255000

now we know that,

255,000 = Paymentat the beginning *(1+6.2%/4)^7.75*4 Paymentat the beginning = 255000/1.6109 Paymentat the beginning = 158293.259 Hence, total amout to be invested is $158293.259 please give us a thumbs up