Question
In: Finance
Sammy has worked for a company with a retirement program, and today is retiring from her...
Sammy has worked for a company with a retirement program, and
today is retiring from her job with the amount of
$165 in her retirement account. She decides to
withdrawal an equal amount from this account, once a year,
beginning immediately, and ending 18 years from
today (for a total of 19 payments). If the
interest rate is 4.50%, solve for the annuity
amount such that she uses up her full accumulation.
Solutions
Expert Solution
Present value of annuity due=(1+rate)*Annuity[1-(1+interest rate)^-time period]/rate
165=1.045*Annuity[1-(1.045)^-19]/0.045
165=Annuity*13.1599918
Annuity=165/13.1599918
=$12.54(Approx)
jeff jeffy answered 2 years agoRelated Solutions
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