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8. Loren already knows that he will have $500,000 when he retires. If he sets up a payout
annuity for 30 years in an account paying 10% interest, how much could the annuity provide
each month?

Respuesta :

Answer:

Annuity for 30 years per month =  $22846  

Step-by-step explanation:

The Principal  = $500,000

The interest rate at 10%

The time period =30 years

So, [tex]Amount = prinipal (1 + \frac{Rate}{100})^{Time}[/tex]

Or, [tex]Amount = $500,000 (1 + \frac{10}{100})^{30}[/tex]

Or, Amount = $8724701.134

So, Compound Interest = A - P

Or,  CI =  $8724701.134 - $500,000 = $8224701.13

∴ Annuity for 30 years per month = [tex]\frac{8224701.134}{360}[/tex]=    $22846  Answer

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