Asked by Mallory McGroarty on Jun 11, 2024
Verified
If $300,000 is used to purchase an annuity earning 4.5% compounded monthly and paying $2,500 at the end of each month, what will be the term of the annuity? Include the final, smaller annuity payment in the total.
Compounded Monthly
A process where interest earnings are calculated and added back to the main balance every month, aiding in the growth of the investment.
Annuity Payment
A periodic payment received from an annuity investment, typically for retirement income.
Final Payment
the last payment that completes the payoff of a loan or financial obligation.
- Compute the duration of routine annuities by examining the amounts of payments, rates of return, and base principals.
Verified Answer
LH
Learning Objectives
- Compute the duration of routine annuities by examining the amounts of payments, rates of return, and base principals.