frank bell has just retired from the telephone company. his total pension funds have an accumulated value of $200,000, and his life expectancy is 16 more years. his pension fund manager assumes he can earn 10% return on his assets. what will be his yearly annuity for the next 16 years?

Question

contestada

Respuesta :

Qwlizard Qwlizard · Answer 1 · 2022-11-24T13:44:08+01:00

The yearly annuity for the next 16 years of the frank bell will be 7,189,945.97.

We have given ib the question,

Since the $300,000 is at the start of retirement. That would be the present value of the annuity payments.

PV= 200000

N= 16 (i.e frank bell life expectancy)

R or I/y= 10 % (% of return on his assets)

We have to calculate the yearly annuity for the next 16 years, for this we will use the formula given below:

[tex]Future \:value\: of \:annuity\:=\:PMT\:[\frac{(1+r)^{n}-1 }{r} ][/tex]

Putting the values provided in the question,

[tex]=\:200000\:[\frac{(1+0.10)^{16}-1 }{0.10} ]\\\\=\:200000\:[\frac{ 3.59497 }{0.10} ]\\\\=\:200000 \; \times \; 35.9497\\\\= 7,189,945.97[/tex]

Therefore, frank bell's yearly annuity for the next 16 years will be 7,189,945.97.

To learn more about annuities, visit the link below:

brainly.com/question/24277213

#SPJ4