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 Determine the amount that can be withdrawn quarterly from the account for 20 years, assuming ordinary annuity.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
i = 0.046/4 = 0.0115 per quarter, n = 20·4 = 80.
For an ordinary annuity PV = R[(1 − (1+i)^(−n))/i], so
R = PV · i / [1 − (1+i)^(−n)]
= 506,732.32·0.0115 / [1 − (1.0115)^(−80)]
≈ 506,732.32·0.0115 / 0.599424
≈ $9,722.36.
Answer: a. $9,722.36
For an ordinary annuity PV = R[(1 − (1+i)^(−n))/i], so
R = PV · i / [1 − (1+i)^(−n)]
= 506,732.32·0.0115 / [1 − (1.0115)^(−80)]
≈ 506,732.32·0.0115 / 0.599424
≈ $9,722.36.
Answer: a. $9,722.36
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