You have a $4,000 credit card .
Alonzo plans to retire as soon as he has accumulated $250,000 through quarterly payments of $5,000. If Alonzo invests this money at 5.4% interest, compounded quarterly, how long (to the nearest year) until can he retire?
3.You wish to accumulate $100,000 through monthly payments of $500. If you can earn interest at an annual rate of 4% compounded monthly, how long (to the nearest year) will it take to accomplish your goal?
4.Your pension plan is an annuity with a guaranteed return of 4% per year (compounded quarterly). You can afford to put $1,300 per quarter into the fund, and you will work for 40 years before retiring. After you retire, you will be paid a quarterly pension based on a 25-year payout. How much will you receive each quarter? (Round your answer to the nearest cent.)
Meg’s pension plan is an annuity with a guaranteed return of 3% per year (compounded quarterly). She would like to retire with a pension of $20,000 per quarter for 5 years. If she works 25 years before retiring, how much money must she and her employer deposit each quarter? HINT [See Example 5.] (Round your answer to the nearest cent.)
6.Find the present value PV of the annuity account necessary to fund the withdrawal given. HINT [See Quick Example 3.] (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.)
$1,700 per quarter for 10 years, if the account earns 6% per year
PV = $?
7.Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. HINT [See Quick Example 2.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.)
$40,000 in a fund paying 7% per year, with monthly payments for 5 years
PMT = $ ?