Answered

Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Get detailed and precise answers to your questions from a dedicated community of experts on our Q&A platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

To receive monthly payments of $1500 for 20 years, how much would a person have to invest now in an annuity with an annual interest rate of 3.1% to achieve this goal? Round the answer to the nearest dollar.

Sagot :

xero099

Given the possibility of an investment with an annual interest rate of 3.1 %, the person must deposit $ 580645.16 to receive monthly payments of $ 1500 for 20 years.

How to determine the require investment to receive a desired monthly payment

According to this question, the person have decided to invest money to receive a monthly payment, meaning no savings and the adequacy of using the simple interest formula:

g = C · (r/100)     (1)

Where:

  • C - Invested money, in monetary units.
  • r - Monthly interest rate, in percentage.
  • g - Monthly payment, in monetary units.

If we know that g = 1500 and r = 3.1/12, then the invested money must be:

C = 100 · g/r

C = 100 · [1500/(3.1/12)]

C = 580645.16

Given the possibility of an investment with an annual interest rate of 3.1 %, the person must deposit $ 580645.16 to receive monthly payments of $ 1500 for 20 years.

To learn more on interest rates: https://brainly.com/question/13735414

#SPJ1

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.