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1. Mel plans to save 13,900 dollars per year for 3 years. His first savings contribution...

1. Mel plans to save 13,900 dollars per year for 3 years. His first savings contribution is expected in 1 year. He then plans to withdraw 19,200 dollars per year for as long as he can. Mel expects to earn 4.42 percent per year. How many payments of 19,200 dollars can Mel expect to receive if his first annual payment of 19,200 dollars is received in 3 years?  Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00).

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Expert Solution

1- Future value of annual Payment =Using FV function in MS excel fv(rate,nper,pmt,pv,type) rate =4.42% nper =3 pmt =-13900 fv =0 type =0 FV(4.42%,3,-13900,0,0) $43,570.30
2- How many payments of 19,200 dollars can Mel expect to receive = Using nper function in MS excel nper(rate,pmt,pv,fv,type) rate =4.42% pmt =19200 pv= -43570.30 fv =0 type =0 NPER(4.42%,19200,-43570.3,0,0) 2.44

jeff jeffy answered 2 years ago
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