Graham Bell has just retired after 30 years with the telephone company. His tota
ID: 2764423 • Letter: G
Question
Graham Bell has just retired after 30 years with the telephone company. His total pension funds have an accumulated value of $400,000, and his life expectancy is 16 more years. His pension fund manager assumes he can earn a 10 percent return on his assets.
What will be his yearly annuity for the next 16 years? (Use a Financial calculator to arrive at the answer. Round the final answer to the nearest dollar amount.)
ANNUITY $
USE FINNACIAL CALCULATOR!!!!!!!!!!!!!!!! BEING DONE ON CONNECT AND PLEASE ROUND THE FINAL ANSWER TO THE NEAREST DOLLAR AMOUNT.
Graham Bell has just retired after 30 years with the telephone company. His total pension funds have an accumulated value of $400,000, and his life expectancy is 16 more years. His pension fund manager assumes he can earn a 10 percent return on his assets.
Explanation / Answer
The Principle amount =$ 400000
Intrest rate =10%
No years to maturity=16 years
so the maturity value =400000(1+ 10%)16 => 400000(1.10)16 =>400000*4.595=1838000
Annuity for 16 years would be =1838000/16=$ 114,875
so $ 114,875 is his annuity for next 16 years
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