Mary buys a 20 year annuity immediate for $100,000 subject to 6% effective annual interest rate. The first payment is one year from the time of purchase. Mary reinvests each of the 20 payments, as soon as she received them at the end of each year, into a fund that earns 8% interest on deposits. What is the accumulated amount in Mary's fund right after the 20th annuity payment has been deposited into the fund?
Mary buys a 20 year annuity immediate for $100,000 subject to 6% effective annual interest rate. The first payment is one year from the time of purchase. Mary reinvests each of the 20 payments, as soon as she received them at the end of each year, into a fund that earns 8% interest on deposits. What is the accumulated amount in Mary's fund right after the 20th annuity payment has been deposited into the fund?
Chapter3: Income Sources
Section: Chapter Questions
Problem 40P: Minnie owns a qualified annuity that cost 78,000. The annuity is to pay Minnie 650 per month for...
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Transcribed Image Text:Mary buys a 20 year annuity immediate for $100,000 subject to 6% effective
annual interest rate. The first payment is one year from the time of purchase.
Mary reinvests each of the 20 payments, as soon as she received them at the
end of each year, into a fund that earns 8% interest on deposits. What is the
accumulated amount in Mary's fund right after the 20th annuity payment has
been deposited into the fund?
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