Question

As the contestant with the longest winning streak in the history of ropardy, Ken Jennings won more than $2.5 million. Suppose he invested $1.6 million in an ordinary annuity that earned 4.8%, compounded monthly. How much would he receive at the end of each month for the next 25 years? (a) Decide whether the problem relates to an ordinary annuity or an annuity due ordinary annuity O annuity due (b) Selve the problem. (Round your answer to the nearest cent.) $

Answer 1

0 Solution - Given that Investment lo6 million dollats Interest onke - 4.8% compounded monthly Teem - 25 yeato He received at the end of each month. Therefore the problem delates to an coolingy amelity If he deceive at the begtaning of each month Then @ it oelated to an anuity duco poesent value = 16*106 dollarg Inteocol catc monthly = 468 12 0°4% foomula: Tcom - 28 yeath = 25*12 = 300 months. Receive at the End of Each month. i [PV (1+1)] (rign- whese i = 0.4 = 0.004 100 PV = 106 106 dollats n=300 0.00471067100)(1+0.004ge (1+acoupoo

0.00UL 1600,000) (1.00usbo (10004,800 -) . 6400 (1.00ujito (1.004) 300, - Guco ( 30312170) 3-312179-1 51 21197.9456 2.312179 9, 1670 95 dollaro He will receive month poo the next 089,167.95 at the End of Each yeats. roote :- As per chego quidlines. I have done the piosl question please sepost the desto THANK YOU.

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