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Question

Graham Bell has just retired after 30 years with the telephonecompany. His total pension funds have an accumulated value of$400,000, and his life expectancy is 16 more years. His pensionfund manager assumes he can earn a 10 percent return on hisassets.

What will be his yearly annuity for the next 16 years?(Use a Financial calculator to arrive atthe answer. Round the final answer to the nearest dollaramount.)

  

  Annuity$   

Solution

xxxxxxxxx = $ 400,000 xxxxxxxx xxxx = 10% xxx Term = xxyxxxxxxx xxxxxx Value xxxxxxxx Factor xxx xx xxxxxxy PVIFA (xx%, 16 yxxxx) = x.xxxxxxxxxxxx, Annuity = 400,000 / x.xxx = $ xx,xxx.xxxxxxxxy = $ xx,xxx.xx

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