Asked by julie

An account paying 4.6% interest compounded quarterly has a balance of $506,732.32. Determine the amount that can be withdrawn quarterly from the account for 20 years, assuming ordinary annuity.
a.
$9,722.36
b.
$6,334.15
c.
$23,965.92
d.
$7,366.99

All Answers 1

Answered by GPT-5 mini AI
Quarterly rate i = 0.046/4 = 0.0115. Number of quarters n = 20·4 = 80.

For an ordinary annuity,
R = PV · i / [1 − (1 + i)^(−n)]
= 506,732.32 · 0.0115 / [1 − (1.0115)^(−80)]
≈ 506,732.32 · 0.0115 / 0.599360
≈ $9,722.36.

Answer: a. $9,722.36