A personal account earmarked as a retirement supplement contains $242,400. Suppose $200,000 is used to establish an annuity that earns 4%, compounded quarterly, and pays $4500 at the end of each quarter. How long will it be until the account balance is $0? (Round your answer UP to the nearest quarter.) quarters
A personal account earmarked as a retirement supplement contains $242,400. Suppose $200,000 is used to establish an annuity that earns 4%, compounded quarterly, and pays $4500 at the end of each quarter. How long will it be until the account balance is $0? (Round your answer UP to the nearest quarter.) quarters
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 5E
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A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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Transcribed Image Text:A personal account earmarked as a retirement supplement contains $242,400. Suppose $200,000 is used to establish an annuity that earns 4%, compounded quarterly, and pays $4500 at the end of each quarter. How long will it be until the account balance is $0? (Round
your answer UP to the nearest quarter.)
quarters
Transcribed Image Text:Juanita Domingo is starting college in three months. Her parents want to establish a college trust for her today which will provide 16 payments throughout the next four years as well as the cost of a graduation trip when she completes college four years from now. They want
her to be able to make withdrawals of $2,500 at the end of every quarter for the next four years. Additionally, she will withdraw an extra $5,000 on the same day as the last regular $2,500 withdrawal. If money is worth 6.1%, compounded quarterly, how much must be
deposited now to provide for this trust? (Round your answer to the nearest cent.)
$
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