An individual deposited $400,000 into an account which earns 9.6% compounded quarterly. If the person wants...
An individual deposited $400,000 into an account which earns 9.6% compounded quarterly. If the person wants to receive quarterly payments of $10,000 at the end of every three months, determine the number of full payments the person will receive.
Homework Answers
Present value of annuity= payment per period * [1-(1+i)^-n]/i
i = interest rate per period
n = number of
=>
Present value = 400000
=>
10000 * [1-(1+0.096/4)^-n]/(0.096/4) = 400000
=>
number of payments = - ln(0.04)/ln(1+0.096/4)
= 135.72
= 136 payments
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