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    Ordinary Annuity

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    An ordinary annuity pays 7.55% compounded monthly. A. Morty Zayshawn wants to make equal monthly deposits in his account for 30 years in order to then make equal withdrawals of $2,000 per month for the next 15 years, reducing the balance to zero. How much should be deposited each month for the first 30 years?

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    Solution Preview

    We have to use annuity formula to solve the problem.

    PVA = W x 1 - 1 where PVA is the present value of loan
    (1 + i)n W is the amount required to be paid at the end of each year

    Solution Summary

    This solution is comprised of a detailed explanation to answer the request of the assignment in text file.