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A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of​ retirement, you will have​ $31,360 to your credit in the plan. The plan anticipates earning​ 8% interest annually over the period you receive benefits. How much will your annual benefits​ be, assuming the first payment occurs one year from your retirement​ date?

Respuesta :

Answer:

Annual benefit = $3194

Explanation:

Given data:

Period of annuity = 20 years

Total  Amount of money at retirement time = $31,360

Rate of interest = 8%

annual benefit can be obtained b using given formula:

annual benefit  [tex]= \frac{total\ amount}{PV\ factor}[/tex]

PV factor for given 8% rate for 20 year is 9.8181

Annual benefit =[tex]\frac{31,360}{9.8181} = $3194[/tex]

Answer:

Annual benefit = $3194

Explanation:

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