Betty Bronson has just retired after 25 years with the electric company. Her tot
ID: 2714591 • Letter: B
Question
Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $220,000, and her life expectancy is 16 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 16 years?
Please show step by step on how you got this - in simplistic form. Really trying to learn this and not just acquire answer
Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $220,000, and her life expectancy is 16 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 16 years?
Please show step by step on how you got this - in simplistic form. Really trying to learn this and not just acquire answer
Explanation / Answer
Answer: Calculation of the yearly annuity for the next 16 years:
A=PVA/PVIFA(9%,16 periods)
=$220000/8.313
=$26464.5736
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.