Jodi is retiring at the age of 65. When she retires, she estimates that she will need a monthly income for 25 years. If Jodi starts with $328,133.32 in an account that pays 6.2% interest compounded monthly, approximately what monthly income will she be able to draw? a. $2,665 b. $2,154 c. $1,948 d. $1,094
Answers
Jodi can draw a monthlyincome of approximately $2,154 from her investment.
Option B is the correct answer.
What is compound interest?
It is the interest we earned on the interest.
The formula for the amount earned with compoundinterest after n years is given as:
A = P
P = principal
R = rate
t = time in years
n = number of times compounded in a year.
We have,
The first step to solve this problem is to find the futurevalue (FV) of the initial investment of $328,133.32 over 25 years, compounded monthly at 6.2% interest rate.
We know that the futurevalue (FV) can be calculated using the formula:
Where:
PV = Present value (initial investment) = $328,133.32
r = Interest rate per year = 6.2%
n = Number of years = 25
Substituting the values, we get:
FV ≈ $889,076.76
The futurevalue (FV) of the investment after 25 years is approximately $889,076.76.
Next, we need to calculate the monthlyincome that Jodi can draw from this investment.
To do this, we can use the formula for the present value (PV) of an annuity:
Where:
C = Monthly income
r = Interest rate per year = 6.2%
n = Number of years = 25
We need to solve for C, which is the monthly income that Jodi can draw from the investment.
Substituting the values, we get:
Simplifying this equation, we get:
C ≈ $2,153.96
Therefore,
Jodi can draw a monthlyincome of approximately $2,153.96 from her investment.
Rounding to the nearest dollar, the answer is B. $2,154.
Learn more about compoundinterest here:
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Answer:
Answer is B just took the test.
Step-by-step explanation:
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First solve the square root which is 7
Funny enough, this makes 7 * 7 = 49
So the answer is 49!
Hope I helped!
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With the Brainly help you've gotten in the last 15 minutes or so,
you should be able to do this one now.
The mystery number . . . . . . . M
Half of it . . . . . . . . . . . . . . . . 1/2 M
Half of it decreased by 8 . . . 1/2 M - 8
You said that's 3 .
So the equation you have to solve is
1/2 M - 8 = 3
Add 8 to each side: 1/2 M = 11
Multiply each side by 2 : M = 22
This is easier than the last one we ( I ) did.