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A person wants to establish an annuity for retirement purposes. He wants to make quarterly deposits for 20 years so that he can then make quarterly withdrawals of $5000 for 10 years. The annuity earns 7.32% interest compounded quarterly.

(a) How much will have to be in the account at the time he retires?

(b) How much should be deposited each quarter for 20 years in order to accumulate the required amount?

(c) What is the total amount interest earned during the 30-year period?

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Jamar Ferry
Jamar FerryLv2
29 Sep 2019

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Upon graduating from college 35 years ago, Dr. Nick Riviera was already
thinking of retirement. Since then he has made deposits into his retirement fund on a quarterly basis in the amount of $300. Nick has just completed his final payment and
is at last ready to retire. Additionally, an uncle died 15 years ago and Nick received a check of $20, 000 at that time. He deposited the entire amount into his retirement
fund.
If Nick expects to live for 20 more years, how much will his quarterly income be
during his retirement? His retirement fund has earned 9% compounded quarterly.
This rate of return is expected to continue.10. Upon graduating from college 35 years ago, Dr. Nick Riviera was already
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quarterly basis in the amount of $300. Nick has just completed his final payment and
is at last ready to retire. Additionally, an uncle died 15 years ago and Nick received a
check of $20, 000 at that time. He deposited the entire amount into his retirement
fund.
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during his retirement? His retirement fund has earned 9% compounded quarterly.
This rate of return is expected to continue.

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