A continuous annuity with withdrawal rate N = $1,200/year and interest rate r = 2% is funded by an initial deposit Po. (a) When will the annuity run out of funds if Po = $55,000? The annuity runs out after approximately 0.02 Answer to the nearest whole year. (b) Which initial deposit Po yields a constant balance? Po = $ 60000 years.
A continuous annuity with withdrawal rate N = $1,200/year and interest rate r = 2% is funded by an initial deposit Po. (a) When will the annuity run out of funds if Po = $55,000? The annuity runs out after approximately 0.02 Answer to the nearest whole year. (b) Which initial deposit Po yields a constant balance? Po = $ 60000 years.
College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 12E
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Transcribed Image Text:A continuous annuity with withdrawal rate N = $1,200/year and interest
rate r = 2% is funded by an initial deposit Po.
(a) When will the annuity run out of funds if Po = $55,000?
The annuity runs out after approximately 0.02
Answer to the nearest whole
year.
(b) Which initial deposit Po yields a constant balance? Po = $
60000
years.
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