Tina has saved $20000 from her summer jobs. Rather than work for a living, she plans to buy an annuity from a trust company and become a beachcomber in Fiji. An annuity will pay her a certain amount each month for the rest of her life and is calculated at 7% interest, compounded monthly, over Tina's 55 remaining years. Tina calculated that she needs at least $5 per day and needs $1200 for air fare. can she retire now? how much would she have available to spend each day?
Available amount 20000
Less: airfare 1200
Amount left 18800
Life 55 years
Life in months 660
Amount needed per day $5.00
Amount needed per month $150.00
Interest rate 7% per year
Monthly rate of interest 0.58% per month
Available per month based on monthly interest rate $111.49 per month
Formula =-PMT(0.58%,660,18800,,)
Since she requires $ 150 per month, she cannot retire now
If she decides to retire, she will get $3.72 per day
Tina has saved $20000 from her summer jobs. Rather than work for a living, she plans...
Tina has saved $20 000 from her summer jobs. Rather than work for a living, she plans to buy an annuity from a trust company and become a beachcomber in Fiji. An annuity will pay her a certain amount each month for the rest of her life and is calculated at 7 percent interest, compounded monthly, over Tina’s 55 remaining years. Tina calculates that she needs at least $5 per day to live in Fiji, and she needs $1200 for...