View the step-by-step solution to:

Tom has just won the lottery worth 1,000,000. He decides to take the annuity option that guarantees equal monthly payments over 20 years The annuity...

Tom has just won the lottery worth 1,000,000. He decides to take the annuity option that guarantees equal monthly payments over 20 years The annuity earns 4.2% interest, compounded monthly. How much will his payments need to be so that the 1,000,000 draws down to zero after 20 years. ? Round to the nearest cent.

Top Answer

payment={(r*PV)/(1-(1+r) -n } where r=4.2/1200=0.0035... View the full answer

Sign up to view the full answer

Other Answers

The required equal... View the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online