Question

You have just inherited $150,261 from a trust that has matured. you would like to invest the total amount into an account that pays you an annual compounded interest rate of 9.1%, and you would like to make annual withdrawals over the next 20 years such that by the end of this 20 year period, the amount remaining in the account will be zero dollars. determine, from the given information, the amount of the annual withdrawals. round to the nearest cent. a. $16,578.03 c. $15,978.10 b. $162,851.31 d. $15,575.98

Answer 1

A. 16,578.03 that’s the answer to the nearest

Answer 2

The amount of the annual withdrawals will be $16,574.24.The amount is the sum of the principal and the simple interest gain.

What is the amount?

The complete repayment of money at the end of the time period for which it was borrowed is referred to as the amount.

The given data in the problem is;

P ia the annual payment

PV is the present value = $150,261

r is the rate of intreast = 9.1% = 0.091

n is the time period= 20

The formula for the annual payment is found as;

$\rm P= \frac{r \times PV}{1-(1+r)^{-n}} \\\\ \rm P= \frac{0.091 \times 150261}{1-(1+0.091)^{-20}} \\\\ \rm P=16,754.2437$

Hence the amount of the annual withdrawals will be $16,574.24.

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https://brainly.com/question/12184047