At t=0, a retirement account has $511,501. The account earns interest at a nomin

Question

At t=0, a retirement account has $511,501. The account earns interest at a nominal rate of 7.7166% compounded 2 times per year. The first payment will be X and is made at the end of the first time period (note, time period is different than year). Each successive payment will be 1.1% higher than the previous payment and be made at the end of the corresponding time period. The retirement account will fund payments for 20 years. Determine the balance in the account after the 12th payment has been made.

Please show work no excel

Explanation / Answer

Answer:

Please find attached the solution:

Payment left after 12th Instalment = $1,730,958.

Payment made till 12th Instalement = $594,158.

Tenure Semi-Annually) 40 Interest 3.86% FV $2,325,116 Account (511,501) Payment left after 12 th Instalment $1,730,958 S.No. Payment in each succesive tenure Sum of tenure Payments to be made 1 1.00 49.91 $46,589 2 1.01 46588.60293 $47,101.08 3 1.02 46588.60293 $47,619.19 4 1.03 46588.60293 $48,143.00 5 1.04 46588.60293 $48,672.57 6 1.06 46588.60293 $49,207.97 7 1.07 46588.60293 $49,749.26 8 1.08 46588.60293 $50,296.50 9 1.09 46588.60293 $50,849.76 10 1.10 46588.60293 $51,409.11 11 1.12 46588.60293 $51,974.61 12 1.13 Total after 12 th Instalment 46588.60293 $52,546.33 $594,158 13 1.14 46588.60293 $53,124.34 14 1.15 46588.60293 $53,708.71 15 1.17 46588.60293 $54,299.50 16 1.18 46588.60293 $54,896.80 17 1.19 46588.60293 $55,500.66 18 1.20 46588.60293 $56,111.17 19 1.22 46588.60293 $56,728.39 20 1.23 46588.60293 $57,352.41 21 1.24 46588.60293 $57,983.28 22 1.26 46588.60293 $58,621.10 23 1.27 46588.60293 $59,265.93 24 1.29 46588.60293 $59,917.86 25 1.30 46588.60293 $60,576.95 26 1.31 46588.60293 $61,243.30 27 1.33 46588.60293 $61,916.98 28 1.34 46588.60293 $62,598.06 29 1.36 46588.60293 $63,286.64 30 1.37 46588.60293 $63,982.79 31 1.39 46588.60293 $64,686.60 32 1.40 46588.60293 $65,398.16 33 1.42 46588.60293 $66,117.54 34 1.43 46588.60293 $66,844.83 35 1.45 46588.60293 $67,580.12 36 1.47 46588.60293 $68,323.50 37 1.48 46588.60293 $69,075.06 38 1.50 46588.60293 $69,834.89 39 1.52 46588.60293 $70,603.07 40 1.53 46588.60293 $71,379.71

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