Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $30,000 in a fund paying 2% per year, with monthly payments for 10 years

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05-08-2019
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Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $30,000 in a fund paying 2% per year, with monthly payments for 10 years

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valetta valetta · Answer 1 · 2019-08-14T08:39:55+02:00

Answer:

$ 226.04

Explanation:

Given:

Paying fund, FV = $ 30000

Interest rate, i = 2%

Time, t = 10 years

Now,

[tex]\textup{PMT}=\textup{FV}[\frac{i}{(1+i)^n-1}][/tex]

since, the payment is made monthly

thus,

n = 10 × 12 = 120 months

i = 2% / 12 = 0.02 / 12

on substituting the values in the above equation, we get

[tex]PMT={30000}[\frac{\frac{0.02}{12}}{(1+{\frac{0.02}{12}})^{120}-1}][/tex]

or

PMT = $ 226.04

anthougo anthougo · Answer 2 · 2022-08-01T00:42:18+02:00

The periodic payments, necessary to accumulate $30,000 in an annuity account for 10 years at 2% annual interest, are $226.04 monthly.

How are periodic payments computed?

The periodic payments can be determined using an online finance calculator.

Data and Calculations:

N (# of periods) = 120 months (10 x 12)

I/Y (Interest per year) = 2%

PV (Present Value) = $0

FV (Future Value) = $30,000 ($27,124.80 + $2,875.20)

Results:

PMT = $226.04

Sum of all periodic payments = $27,124.80 (226.04 x 120)

Total Interest = $2,875.20

Thus, to have $30,000 in a fund paying 2% per year, with monthly payments for 10 years, the investor needs to make periodic payments of $226.04 monthly.

Learn more about periodic payments at brainly.com/question/24244579