Betty Bronson has just retired after 25 years with the electric company. Her tot

Question

Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $380,000, and her life expectancy is 20 more years. Her pension fund manager assumes he can earn a 9 percent return on her assets.

What will be her yearly annuity for the next 20 years? Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

What will be her yearly annuity for the next 20 years? Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Explanation / Answer

Present value (PV) = $380,000

Return on assets (1/Y) = 9%

N= 20

Future value (FV) = 0

Click on the CPT

Then click PMT function

then PMT = 41,627.66 per year, this is the annuity value

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