## Related questions with answers

Question

**(a) state whether the problem relates to an ordinary annuity or an annuity due and then**
**(b) solve the problem.**

A couple has determined that they need $\$ 1.5$ million to establish an annuity when they retire in $25$ years. How much money should they deposit at the end of each month in an investment plan that pays $10 \%$ compounded monthly, so that they will have the $\$ 1.5 \mathrm{mil}$ lion in $25$ years?

Solutions

VerifiedSolution A

Solution B

Answered 1 year ago

Step 1

1 of 10In this exercise, the task is to determine the periodic payment of an ordinary annuity considering the given input data.

Answered 2 years ago

Step 1

1 of 4**(a)**
Given that the deposit is at the end of each month, we can infer that the problem is an ordinary annuity.

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