Solve
Step
i = 0.06 ÷ 12 = 0.005
n = 20 years
Having just won $1,000,000 after taxes in the state lottery, how much money can you withdraw at the end of each month for 20 years if the banks pays 6% interest compounded monthly.
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Solve |
Step |
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i = 0.06 ÷ 12 = 0.005 |
k = 12, r = 0.10, Monthly means 12 times a year |
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A
is present value = 1,000,000 n = 20 years |
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Find the P the Payment (also called rent) |
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| You would withdraw $7,164.31 every months for 20 years. | |
| Enter 1,000,000 × 0.005 ÷ ( 1 - 1.005 xy ( -12 × 20 ) ) [enter or =] in your calculator | |
| Hint: don't round until you are completely finished with your calculations. | |