Question

Suppose that for retirement purposes, over the course of 20 years, you make monthly deposits of $350.00$350.00 into an ordinary annuity that pays an annual interest rate of 7.898%7.898% compounded monthly. After those 20 years, you then want to make monthly withdrawals for 22 years, reducing the balance in the account to zero dollars.

a) Find the amount of money you have accumulated in the annuity over the first 20 years:

b) How much should you withdrawing monthly from your account so that the balance reaches zero dollars after the final 22 years?

Answer 1

0 iven thal, depotit'ng un amont of f350.00 nto an ordinary annuity :) pay an annual intrd trate» 구898 y. annuiY annuity O ohe re nnumber of gear γ.sateot interest 구.8987. = 0.0789& we get 1/4

12 month Sox/ 1 2 00789 12 12 0.078 350 Ia 2 4-7202 6.575x10 350 χ. 3.820 6:55 xo350x 3.9202 0.0065 350 x 58 7230 2/4

Aymount pev month at Sami Tate of- intcrest So intratニ205303.076 (Present value annuity withovaioal 9 Htence, present val annui 0.078 0 0789 2 73 0.0065 .0065 :AY 15209-03595 ax (152 07 /A 3130) -AX | 152-091 . "-2130

& 05703-076: Ax (124.2779 Aン 165-516 Thus ho Can İthdyaw al an annuihj of- 165.516 monthly upto yeas 4/4