Question

Bartholomew plans to retire in 7 years from today with $500000 in his retirement account, which has an annual return of 3.5 percent. If he receives 12 annual retirement payments of X and his first retirement payment is received in 7 years from today, then what is X, the amount of each retirement payment?

Answer 1

Each payment PVAD:(1+(1-(1:(1+r)^(n-1))]=r)] Here, 3.5% 12 1 Interest rate per annum 2 Number of years 3 Number of compoundings per per annum 1:3 Interest rate per period (r) 2x3 Number of periods (n) Present value 3.5% 12 500,000 Each payment $ 49.992.25 631000:[1+([1-(1=(1+5.8%)^(30-1))]/5.8%))

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