A personal account earmarked as a retirement supplement contains
$242,300. Suppose $200,000 is used to establish an annuity that
earns 5%, compounded quarterly, and pays $5000 at the end of each
quarter. How long will it be until the account balance is $0?
(Round your answer UP to the nearest quarter.)
Information provided:
Present value= $200,000
Quarterly payment= $5,000
Quarterly interest rate= 5%/4= 1.25%
The time till the account balance is $0 is computed by entering the below in a financial calculator in END mode:
PV= -200,000
PMT= 5,000
I/Y= 1.25
Press the CPT key and N to compute the time till the account balance is $0.
The value obtained is 55.7976.
Therefore, the account balance will be 0 at the end of the 56th quarter.
In case of any query, kindly comment on the solution.
A personal account earmarked as a retirement supplement contains $242,300. Suppose $200,000 is used to establish...
A personal account earmarked as a retirement supplement contains $242,300. Suppose $200,000 is used to establish an annuity that earns 6%, compounded quarterly, and pays $5500 at the end of each quarter. How long will it be until the account balance is $0? (Round your answer UP to the nearest quarter.)
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A personal account earmarked as a retirement supplement contains $292,400. Suppose $250,000 is used to establish an annuity that earns 6%,...
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