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What is the annual interest rate when calculating part

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Samantha has come to you for advice on her retirement planning. She is currently 55 years old and intends to turn her $675,000 current savings into an immediate annuity. Assume the annuity has a 5.00 percent annual interest rate, and is distributed at the beginning of the month.

(a) If she needs a $4,000 annuity payments per month with no money left in the annuity account, how long will the annuity last?

(b) What if she changes her mind, and intends to leave $130,000 for her son when she dies, how long will the annuity last, given she receives a $4,000 monthly annuity payment?

How many years will the annuity last for Samantha with no money left in the annuity account? years.

How many years will the annuity last for Samantha with $130,000 money left in the annuity account for her son? Years.

What is the annual interest rate when calculating part (b)? %

What is the periods per year when calculating part (b)?

What is the present value when calculating part (b)? $ What is the future value when calculating part (b)? $

What is the periodic payment when calculating part (b)

Reference no: EM131014335

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