Keith receives payments of $14 500.00 at the beginning of each month from a pension fund of $1 500 000.00. Interest earned by the fund is 7.6% compounded monthly. What is the number of payments Keith will receive?

Question

Quizplus · Accepted Answer

The number of payments can be calculated using the formula for the present value of an annuity due. The present value is $1,500,000, the monthly payment is $14,500, the monthly interest rate is 0.076/12, and payments are made at the beginning of each period. Solving for the number of payments gives approximately 167.

Keith Receives Payments of $14 500