Share
Explore BrainMass

How much will the Bank have to pay every year?

7. Sara Shouppe has invested $100,000 in an account at her local bank. The bank will pay her a constant amount each year for 6 years, starting one year from today, and the account's balance will be 0 at the end of the sixth year. If the bank has promised Ms. Shouppe a 10% return, how much will they have to pay him each year?

Solution Preview

PV (Ordinary) = PMT * [1 - {(1 + ι)^-p}] / ι

Here, PV = 100000, i = 10/100 ...

Solution Summary

A Complete, Neat and Step-by-step Solution is provided.

$2.19