Wow, 17% interest from a savings account ?
anyway ....
P( 1 - 1.17^-20)/.17 = 250000
..
P = $57, 309.99
this might seem unreasonably high, but remember the interest rate is unreasonable,
As a matter of fact his fund will earn .17(250,000)
or $42,500 in interest the first year, so the fund will only decrease by 57310 - 42500 or $ 14,810
Earl Watkins is ready to retired and has saved up $250,000 for that purpose. He places all of this money into an account which will pay him annual payments for 20 years. How large will these annual payments be if the account earns 17% compounded annually?
1 answer