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Acme Annuities recently offered an annuity that pays 4.5% compounded monthly. What equal monthly deposit should be made into this annuity in order to have$85,000 in 19 years?The amount of each deposit should be $(Round to the nearest cent.)

Question
Acme Annuities recently offered an annuity that pays 4.5% compounded monthly. What equal monthly deposit should be made into this annuity in order to have
$85,000 in 19 years?
The amount of each deposit should be $
(Round to the nearest cent.)
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Acme Annuities recently offered an annuity that pays 4.5% compounded monthly. What equal monthly deposit should be made into this annuity in order to have $85,000 in 19 years? The amount of each deposit should be $ (Round to the nearest cent.)

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Step 1

Annuities are financial products that are sold by the financial institutions (like insurance companies) in which the institutions pay a stream of payments to the investors at a regular interval of time.

Step 2

We can determine the monthly payments using excel.

Future value $85000
Present value-$0
Time period is 19 years, when compounded monthly, the number of
periods 19x12=228
Rate of interest is 4.5%, monthly interest rate -4.5%-12=0.00375
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Future value $85000 Present value-$0 Time period is 19 years, when compounded monthly, the number of periods 19x12=228 Rate of interest is 4.5%, monthly interest rate -4.5%-12=0.00375

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Step 3
A
B
1 Future value
$85,000
$0
2 Present value
3 Time period
4 Rate
228
0.00375
($236.53)
5 Payment=
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A B 1 Future value $85,000 $0 2 Present value 3 Time period 4 Rate 228 0.00375 ($236.53) 5 Payment=

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