Question
Consider an annuity with an initial value of R78000 and monthly withdrawals of R y. The annuity has an interest rate of 4% per annum,
Consider an annuity with an initial value of R78000 and monthly withdrawals of R y. The annuity has an interest rate of 4% per annum, compounded monthly.
Develop the precise recurrence relation that characterizes this financial scenario.
Construct a model for the remaining value in the annuity after n months and determine the value of the monthly withdrawals such the remaining balance in the annuity after a period of 9 months is R45000. Show all workings.
Step by Step Solution
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Step: 1
Let Vn be the remaining value in the annuity after n months Th...
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
