Answer:
receive at the end of each month is $7591.79
Explanation:
given data
won = $2.5 million
invested = $1.2 million
earned = 4.25%
time = 20 year
to find out
How much would he receive at the end of each month
solution
we consider monthly annuity = P
so present value of money invested will be express here as
present value of money = monthly annuity × [tex]\frac{1-(1+\frac{r}{n})^{-t*n}}{\frac{r}{n}}[/tex] ............................1
here r is rate and n is 12 months in a year and t is time period
put value in equation 1
1200000 = P × [tex]\frac{1-(1+\frac{0.045}{12})^{-20*12}}{\frac{0.045}{12}}[/tex]
solve it we get
P = $7591.79
receive at the end of each month is $7591.79
