SOLUTION: The amount (future value) of an ordinary annuity is given. Find the periodic payment. (Round your final answer to two decimal places.) A = $22,500, and the annuity earns 4% annual

Question 1194574: The amount (future value) of an ordinary annuity is given. Find the periodic payment. (Round your final answer to two decimal places.)
A = $22,500, and the annuity earns 4% annual interest compounded monthly for 10 years.
$
Answer by math_tutor2020(3817) (Show Source): You can put this solution on YOUR website!

We'll use this formula
FV = P*( (1+i)^n - 1 )/i
which is the ordinary future value annuity

where,
FV = future value
P = monthly payment
i = interest rate per month in decimal form
n = number of months

In this case,
FV = 22500 dollars
P = unknown
i = 0.04/12 = 0.003333 approximately
n = 10*12 = 120 months (equivalent to 10 years)

Let's solve for P
FV = P*( (1+i)^n - 1 )/i
22500 = P*( (1+0.003333)^120 - 1 )/0.003333
22500 = P*147.246699190856
P = 22500/147.246699190856
P = 152.804783561472
P = 152.80

Answer: $152.80

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