Lucy won a large sum in the lottery. She invested part of her winnings into a fund earning 7.95% compounded monthly. She has arranged a systematic withdrawal plan that provides for 120 monthly payments increasing at a constant rate of 0.9% per payment. The first payment of $850 is due one month after she set up the fund. How much interest is included in the payments?

Lucy won a large sum in the lottery. She invested part of her winnings into a fund earning 7.95% compounded monthly. She has arranged a systematic withdrawal plan that provides for 120 monthly payments increasing at a constant rate of 0.9% per payment. The first payment of $850 is due one month after she set up the fund. How much interest is included in the payments?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

Natalie started a fund that would pay out $2,400.00 every month in perpetuity. The fund earns 5.52% compounded monthly. Answer the following questions, rounding your answers to two decimal places. a. How much money would be required to set up this fund? $4 Round to the nearest cent b. How much less money is required to set up the fund than if the money was earning 5.52% compounded semi-annually? Round to the nearest cent SAVE PROGRESS EN CM (8 f1o f1 10 8 3 1/4 /2 %23
Garrett wants to accumulate at least $35,000 by depositing $1,500 at the end of each month into a fund that earns interest at 4.5% compounded monthly. a. How many deposits does she need to make in order to reach her goal? Round to the next payment b. How long will it take Garrett to reach her goal? o year(s) o month(s) Express the answer in years and months, rounded to the next payment period
Devin started a fund that would pay out $1,400.00 every month in perpetuity. The fund earns 3.72% compounded monthly. Answer the following questions, rounding your answers to two decimal places. a. How much money would be required to set up this fund? %$4 Round to the nearest cent b. How much less money is required to set up the fund than if the money was earning 3.72% compounded semi-annually? $4 Round to the nearest cent
Mrs. Quiton deposited Php 120,000.00 into a college fund at the beginning of every month for 10 years . The fund earns 9% annual interest , compounded monthly . She paid at the end of the month . How much is in the account right after the last deposit ? 1. What is the type of annuity illustrated in the given problem? A. Simple Annuity B. General Annuity C. Deferred Annuity D. Complex Annuity 2. Determine the present value of the deposit. A. Php 12,000.00 B. Php 30,000.00 C. Php 60,000.00 D. Php 75,000.00
Cynthia wants to accumulate at least $40,000 by depositing $1,200 at the end of each month into a fund that earns interest at 5.75% compounded monthly. a. How many deposits does she need to make in order to reach her goal? Round to the next payment b. How long will it take Cynthia to reach her goal? year(s) month(s) Express the answer in years and months, rounded to the next payment period
Ms Oksana Doe has just inherited an investment account worth $2,800,000 from her grandparents. The fund earns an annual interest rate of 6%. She plans to make uniform annual withdrawals from the account over the next 25 years. Answer the following two questions: 1. How much will each annual withdrawal be? OA. $223,160 OB. $47,320 OC. $50,960 OD. $232,120 OE. $218,960 2. What will be the balance in the account immediately after making the 8th annual withdrawal? OA. $1,359,698 OB. $1,048,320 OC. $2,294,110 O D. $2,431,991
Cody invested the profit of her business in an investment fund that was earning 2.25% compounded monthly. She began withdrawing $5,000 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 3 years, how much money did she initially invest in the fund?
Amanda invested the profit of her business in an investment fund that was earning 3.25% compounded monthly. She began withdrawing $3,500 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 7 years, how much money did she initially invest in the fund? $ Round to the nearest cent X
Tyler invested the profit of her business in an investment fund that was earning 3.75% compounded monthly. She began withdrawing $4,500 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 5 years, how much money did she initially invest in the fund? $ $0.00 Round to the nearest cent
Paige invested the profit of her business in an investment fund that was earning 3.75% compounded monthly. She began withdrawing $4,000 from this fund every 6 months, with the first withdrawal in 5 years. If the money in the fund lasted for the next 3 years, how much money did she initially invest in the fund? $0.00 Round to the nearest cent 4
Juanita Domingo's parents want to establish a college trust for her. They want to make 16 quarterly withdrawals of $2500, with the first withdrawal 3 months from now. If money is worth 6.1%, compounded quarterly, how much must be deposited now to provide for this trust?
Kayla contributed equal deposits at the end of every month for 4 years into an investment fund. She then decided to stop making payments and left the money in the fund to grow for another 4 years. The fund was earning 3.92% compounded monthly for the entire period and the accumulated amount at the end of the term was $60,000. a. Calculate the amount in the fund at the end of 4 years. Round to the nearest cent B. Calculate the size of the periodic deposits into the fund. Round to the nearest cent