Find the amount needed at maturity to generate $1,150 per month interest, if they can get  7 1 4%  interest compounded monthly. $  (b) Find the monthly payment that they would have to make into an ordinary annuity to obtain the future value found in part (a) if their money earns  9 3 4%  and the term is twenty-five years.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Susan and Bill Stamp want to set up a TDA that will generate sufficient interest at maturity to meet their living expenses, which they project to be $1,150 per month. (Round your answers to the nearest cent.)

(a) Find the amount needed at maturity to generate $1,150 per month interest, if they can get 
7
1
4
%
 interest compounded monthly.


(b) Find the monthly payment that they would have to make into an ordinary annuity to obtain the future value found in part (a) if their money earns 
9
3
4
%
 and the term is twenty-five years.
 
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