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Question 9 Annie would like a retirement income of $4,000 per month (beginning of month payments) for 35 years once she retir

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Answer #1

Effective monthly rate, r = (1 + 0.04/2)^(1/6) - 1

r = 0.003305890325

Number of payments = 35 * 12 = 420

Monthly payments of $4,000 are made at the beginning of each month.

We need to find the present value of the payments.

(4+1) • fm D - zna sd

4,000 PV = 0.003305890325* (1 + 0.003305890325)420 *(1+0.003305890325)

PV = 1, 209,961.49501723 * 0.7499723859* (1 +0.003305890325)

PV = $910, 437.598808803

This is the amount Annie should have in her retirement account.

Can you please upvote? Thank You :-)

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