document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1139382>Question 1139382</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Hi I have been trying and trying to find out this answer on my own and I just can't figure it out. Will someone help me solve this please? \r<BR>\n" );
document.write( "\n" );
document.write( "You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $4400 per month. You have access to an account that pays an APR of 7.2% compounded monthly.\r<BR>\n" );
document.write( "\n" );
document.write( "What size nest egg do you need to achieve the desired monthly yield? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #759940 by </B><A HREF=/tutors/aboutme.mpl?userid=rothauserc><B>rothauserc(4718)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=rothauserc><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=rothauserc><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=759940\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> The fixed annuity formula is<BR>\n" );
document.write( ":<BR>\n" );
document.write( "A = (P/r) * [1 -(1+r)^-t], where A is the total amount of the annuity, P is the Payment, r is the interest rate, and t is the time period<BR>\n" );
document.write( ":<BR>\n" );
document.write( "This problem uses months, therefore you have to divide the annual interest rate by 12 and multiply the number of years by 12.<BR>\n" );
document.write( ":<BR>\n" );
document.write( "r = 0.072 / 12 = 0.012<BR>\n" );
document.write( ":<BR>\n" );
document.write( "t = 25 * 12 = 300<BR>\n" );
document.write( ":<BR>\n" );
document.write( "You are given P = 4400<BR>\n" );
document.write( ":<BR>\n" );
document.write( "A = (4400/0.012) * (1 -(1+0.012)^-300) = 356430.9636<BR>\n" );
document.write( ":<BR>\n" );
document.write( "****************************************<BR>\n" );
document.write( "Total amount of nest egg is $356,430.96<BR>\n" );
document.write( "****************************************<BR>\n" );
document.write( ": </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );