23 Samuel Hardy received $48,650 as a severance settlement when his position was terminated. Harvey had just celebrated his 41st birthday. He immediately and prudently invested the money in an account paying a guaranteed 9.6% compounded semi-annually until his 60th birthday last year. At that time, he converted the existing balance into an ordinary annuity paying $3,750 per month with interest at 10% compounded monthly. For how long will the annuity run until all the funds have been paid out?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 24P
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23
Samuel Hardy received $48,650 as a severance settlement when his position was terminated.
Harvey had just celebrated his 41st birthday. He immediately and prudently invested the money in an
account paying a guaranteed 9.6% compounded semi-annually until his 60th birthday last year. At that
time, he converted the existing balance into an ordinary annuity paying $3,750 per month with interest
at 10% compounded monthly. For how long will the annuity run until all the funds have been paid out?
Transcribed Image Text:23 Samuel Hardy received $48,650 as a severance settlement when his position was terminated. Harvey had just celebrated his 41st birthday. He immediately and prudently invested the money in an account paying a guaranteed 9.6% compounded semi-annually until his 60th birthday last year. At that time, he converted the existing balance into an ordinary annuity paying $3,750 per month with interest at 10% compounded monthly. For how long will the annuity run until all the funds have been paid out?
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