An elderly couple invested $18,000 into an account earning 7.35% compounded monthly 45 years ago. Now...
An elderly couple invested $18,000 into an account earning 7.35% compounded monthly 45 years ago. Now they are reinvesting that money into an annuity that earns .275% per month and receiving monthly payments for the next 15 years. How much will the annuity pay out each month?
(write the answer in the form $x,xxx.xx/mo.)
Homework Answers
Value of Investment now = 18,000(1 + 0.0735/12)45*12
Value of Investment now = $486,766.10
Calculating Monthly Payout,
Using TVM Calculation,
PMT = [PV = 486,766.10, FV = 0, N = 180, I = 0.00275]
PMT = $3,432.19
Monthly Payment = $3,432.19
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