SOLUTION: Suppose that a couple plans to set up an ordinary annuity with a R100 000 inheritance they received. What is the amount of the quarterly payments they will receive for the next 6 y

Algebra ->  Finance -> SOLUTION: Suppose that a couple plans to set up an ordinary annuity with a R100 000 inheritance they received. What is the amount of the quarterly payments they will receive for the next 6 y      Log On


   

Question 1155918: Suppose that a couple plans to set up an ordinary annuity with a R100 000 inheritance they received. What is the amount of the quarterly payments they will receive for the next 6 years (while their children are in university) if the account pays 7% per annum, compounded quarterly?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
using the financial calculator at https://arachnoid.com/finance/index.html, i get the following results.

the first one assumes end of time period payments equal to 5138.57 per quarter.
$$$

the second one assume beginning of time period payments equal to 5050.19 per quarter.
$$$

the inputs were:
present value = 100,000 (negative because it's money going out).
future value = 0
number of quarters = 6 years * 4 = 28
interest rate = 7% per year / 4 = 1.75% per quarter
payments are made at the end of the quarter in the first analysis.
payments are made at the beginning of the quarter in the second analysis.
results were obtained by clicking on PMT after all inputs were made.
payments are positive because it's money coming in.