Now Jeremy use 2800000 to invest annuity.some information about this fund as below: - Monthly payments...

Now Jeremy use 2800000 to invest annuity.some information about this fund as below:

- Monthly payments at the end of each month.

- Total term of 8 years

- Residual value of annuity (at end of the total term) equal to 50% of the purchase price - Nominal rate of return provided by annuity of 8% p.a. compounded monthly.

What is the amount Jeremy will receive from the annuity?

Expert Solution


Present value(PV)	$2,800,000
Total Term in years	8
Number of months	96	(8*12)
Monthly interest rate	0.6667%	(8/12)%
Residual Value at end of term (FV)	$1,400,000	(0.5*2800000)
Monthly Annuity	$29,125.44	(Using PMT function with Rate=0.6667%,Nper=96,PV=-2800000, FV=1400000)
Amount of AnnuityJeremy will receive	$29,125

jeff jeffy answered 2 years ago

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