A 10-year annuity providing a rate of return of 5.6% compounded quarterly was purchased for $25,000. The annuity makes payments at the end of each quarter.
a) How much of the twenty-fifth payment is interest?
b) What is the principal portion of the thirteenth payment?
c) What is the total interest in Payments 11 to 20 inclusive?
d) How much is the principal reduction in the second year?
e) What is the final payment?

Question

Quizplus · Accepted Answer

The Answer of A 10-year annuity providing a rate of return of 5.6% compounded quarterly was purchased for $25,000. The annuity makes payments at the end of each quarter.
a) How much of the twenty-fifth payment is interest?
b) What is the principal portion of the thirteenth payment?
c) What is the total interest in Payments 11 to 20 inclusive?
d) How much is the principal reduction in the second year?
e) What is the final payment?

A 10-Year Annuity Providing a Rate of Return of 5