Your nest egg can provide a monthly income of $4000 for 20 years. If you want 15-years annuity rather than 20-years annuity, what will be the monthly income from the same amount of nest egg? Assume an APR of 6%.

Question

Quizplus · Accepted Answer

To find the monthly income for a 15-year annuity, we use the present value of annuity formula. The present value of the 20-year annuity is calculated first, and then this value is used to find the monthly income for a 15-year annuity. The correct calculation results in a monthly income of $4711.4.

Your Nest Egg Can Provide a Monthly Income of $4000