Respuesta :
Huang invests $720 into an annuity every month for five years. At the end of five years, the account has a balance of $50,000. How much of this balance interest is $6800.
What is annuity arrangement?
The purpose of an annuity, a long-term investment provided by an insurance company, is to lessen your chance of outliving your income. Your purchase payments (what you give) are transformed into recurring payments that may last a lifetime through annuitization. An annuity arrangement known as annuity contingent delays the beneficiary's payments until a specific event occurs. A series of payments paid at regular intervals is known as an annuity. The payments (deposits) may be paid every week, every month, every four months, every year, or at any other regular frequency. Mathematical operations referred to as "annuity functions" can be used to compute annuities.
Huang invests $720 into an annuity every month for five years. At the end of five years, the account has a balance of $50,000.
Total year =5
Months in five year:
5×12
=60
The amount invests every month = 720/per month
In 60 months
60 × $720
=$43,200
The amount in end with $50,000
The balance interest is:
50,000 -$43200=
$6800.
Balance interest is: $6800.
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