1. Find the periodic withdrawals PMT for the annuity given. HINT [See Example 4.

Question

1. Find the periodic withdrawals PMT for the annuity given. HINT [See Example 4.] (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $350,000 at 5%, paid out monthly for 14 years

2.Find the periodic withdrawals PMT for the annuity given. HINT [See Example 4.] (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $25,000 at 4%, paid out quarterly for 11 years

Explanation / Answer

1)

$350,000 at 5%, paid out monthly for 14 years

5% = 5/100 => 0.05

i = 0.05 /12 = 0.004167

1+i = 1 + 0.004167

= 1.004167

n = 14 * 12 per year = 168

hence, n = 168

PVoa = PMT [(1 - (1 / (1 + i)n)) / i]

350,000 = PMT[(1 - (1 / (1.004167)168)) / 0.004167]

PMT=2901.1195

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