Answer:
Total amount = $10906400
He would receive = $ 45443.33 every month
Explanation:
Ken invested $1.6 million at 9.6% for 20 yes compounded monthly.
n = 20*12= 140
t = 20
P= 1600000
R= 9.6% = 0.096
Amount A is equal to
A = p(1+r/n)^(nt)
A =
1600000(1+(0.096/140))^ (140*20)
A =
1600000(1 + (6.857*10^-4))^(2800)
A= 1600000(1.0006857)^2800
A = 1600000*6.8165
A = 10906400
Every month, he will get
10906400/(12*20)
= 10906400/240
=$ 45443.333
Answer: Therefore, he would recieve $15,018.74 at the end of each month.
Explanation:
$1.6 million investment is the present value (PV)
PV = $1,600,000
INTEREST RATE(r) = 9.6% or 0.096 compounded monthly = (0.096÷12) = 0.008
PERIOD(n) = 20 years = (20×12) = 240 months
Ordinary value of annuity:
Annuity = (rate × PV) ÷ (1 - (1 + r)^-240)
Annuity = (0.008 × $1,600,000) ÷ (1 - (1 + 0.008)^-240)
Annuity = ($12,800) ÷ (1 - (1.008)^-240)
Annuity = $12,800 ÷ 0.8522687768
Annuity = $15,018.74
Therefore, he would recieve $15,018.74 at the end of each month.
