Craig purchased a house for $450,000, putting down 20%. He has agreed to pay the remaining balance over the next 30 years in 30 equal end-of-year payments, plus 5% compound interest on the unpaid balance. What will the equal payments be?

Craig purchased a house for $450,000, putting down 20%. He has agreed to pay the remaining balance over the next 30 years in 30 equal end-of-year payments, plus 5% compound interest on the unpaid balance. What will the equal payments be?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1 Ann and Sue sell their recreation property. They make $245,000 on the sale and deposit it immediately into a retirement fund. The fund earns 2.45%, compounded monthly, for the entire time. Exactly ten years after the sale, Ann retires. They now want to start supplementing their income with payments from the retirement fund. They want the payments to start one month after Ann retires. They want these payments to last for 5 years. How much can they withdraw per month from the retirement fund? (ANNUITY)
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