Determine the periodic payments PMT on the given loan or m Round your answer to

Question

Determine the periodic payments PMT on the given loan or m Round your answer to the nearest cent.) ortgage. HINT [See Example 5.] $70,000 borrowed at 4% for 10 years, with monthly payments PMT = $ Need Help? Read t Watch It /1 pointsWaneFMAC7 3.3.058. Meg's pension plan is an annuity with a guaranteed return of 5% per year (compounded quarterly). She would like to retire with a pension of $20,000 per quarter for 20 years. If she works 36 years before retiring, how much money must she and her employer deposit each quarter? HINT [See Example 5.] (Round your answer to the nearest cent.) Need Help?Readt

Explanation / Answer

Given : P = $70000, r= 4% , t= 10 years

Formula used :

PMT = Pr(1+r)n/[(1+r)n-1]

r= interest rate per period

n = total number of periods

P= loan amount

Solution:

For monthly payment , r = 0.04/12= 0.0033

n= 10×12= 120

i.e. PMT =[ (70000)(0.0033)(1+0.0033)120]÷[(1+0.0033)120-1]

= $707.29

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