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An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 50 years....

An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 50 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 8.2%, compounded monthly?

It is an ordinary annuity.

Solutions

Expert Solution

Calculating Monthly payment,

Using TVM Calculation,

PMT = [PV = 2,500,000, FV = 0, N = 600, I = 0.082/12]

PMT = $17,375.33

jeff jeffy answered 2 years ago
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