An insurance settlement of $1.5 million must replace Trixie Eden's income for the next 35 years....

An insurance settlement of $1.5 million must replace Trixie Eden's income for the next 35 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 7.5%, compounded monthly?

Solve the problem. (Round your answer to the nearest cent.)

Solutions

Expert Solution

Calculating Monthly Payment,

using TVM Calculation,

PMT = [PV = 1,500,000, FV = 0, N = 420, I = 0.075/12]

PMT = $10,113.64

Monthly Payment = $10,113.64

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

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.

An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 45 years....

An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 45 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 8.1%, compounded monthly?

Adam Feinstein, the owner of a mill, receives a large insurance settlement of several million dollars...

Adam Feinstein, the owner of a mill, receives a large insurance settlement of several million dollars after the mill burns down. Is he under an obligation to rebuild the mill or can he just take the money and retire on it? All of the following answer choices are true EXCEPT: A. If he retires, maybe he could share the money with other people who were affected when they lost their jobs, etc. B. Federal law prevents Feinstein from taking the...

A property has first year NOI of $1.5 million. NOI grows at 7% during the next...

A property has first year NOI of $1.5 million. NOI grows at 7% during the next two years. In year four, NOI goes drops 50% due to a lost tenant. You are very lucky and replace the tenant. Year five NOI is 4X year four. (continues below…) What is year 5 NOI? continue…You have a $10 million mortgage on this property, at 5% interest, amortization of twenty years. There are two partners who have invested $3 million total in the...

A company needs $48,000 in 4 years to replace two trucks. Find the amount it must...

A company needs $48,000 in 4 years to replace two trucks. Find the amount it must deposit at the end of each quarter in a fund earning 6% compounded quarterly.

If I have an investment that generates 1.5 MM during the next 20 years and We...

If I have an investment that generates 1.5 MM during the next 20 years and We know that inflation for the expected period is 5.7% on average. To what amount equivalent of constant annual payments equals those payments in a 12% annual plan with continuous compounding?

A company expects to earn $350,000 per year for 10 years by purchasing a $1.5 million...

A company expects to earn $350,000 per year for 10 years by purchasing a $1.5 million equipment. The asset will be sold for $300k after 10 years. The effective tax rate for the company is 30%, the interest-free MARR is 15% and the average inflation is 2.2%. Compute the IRR for the company. I found the depreciation to be using Straight Line Analysis: $120000 and the taxable income to be $230000. If anyone could help me ill grateful!

You plan on working for the next 35 years before retiring and you would like to...

You plan on working for the next 35 years before retiring and you would like to accumulate $2 million when you stop working. If you start today, how much will you deposit each month to reach $2 million in retirement? Assume you will average a 7% annual rate of return in deposits will be made at the end of each month.

You decide to replace your income of $70,000 a year in retirement for 30 years. How...

You decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need in your retirement account the day you retire to make that happen, assuming a real interest rate of 3%?

AHS must install a new $1.5 million computer to track patient records in its multiple service...

AHS must install a new $1.5 million computer to track patient records in its multiple service areas. It plans to use the computer for only 3 years, at that time a new system will be acquired that will handle both billing and patient records. The company can borrow money at a before-tax cost of 10%. In lieu of buying, AHS could lease the computer for 3 years. Assume that the following facts apply: The computer falls into the 3-year class...

Subjects