An annuity with a cash value of $11,700 pays $320 at the beginning of every month. The investment earns…

Question:

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An annuity with a cash value of $11,700 pays $320 at the beginning of every month. The investment earns 7%

compounded monthly.

(a) How many payments will be paid?

(b) What is the size of the final annuity payment?

(a) The number of payments is

(Round up to the nearest whole number.)

(b) The size of the final payment is $

(Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Expert Answer:

Answer rating: 100% (QA)

To calculate the number of payments and the size of the final annuity payment we can use the formula

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