You have just inherited $150,261 from a trust that has matured. You would like to invest the total amount into an account that pays you an annual compounded interest rate of 9.1%, and you would like to make annual withdrawals over the next 20 years such that by the end of this 20 year period, the amount remaining in the account will be zero dollars. Determine, from the given information, the amount of the annual withdrawals. Round to the nearest cent. a. $16,578.03 c. $15,978.10 b. $162,851.31 d. $15,575.98

Determine, from the given information, the amount of the annual withdrawals. Round to the nearest cent.

a. $16,578.03

Step-by-step explanation:

Year Monthly Interest Capital Amount

150.261

1 16.578 2.904 13.674 147.357

2 16.578 3.169 13.409 144.188

3 16.578 3.457 13.121 140.731

4 16.578 3.771 12.807 136.960

5 16.578 4.115 12.463 132.845

6 16.578 4.489 12.089 128.356

7 16.578 4.898 11.680 123.458

8 16.578 5.343 11.235 118.115

9 16.578 5.830 10.748 112.285

10 16.578 6.360 10.218 105.925

11 16.578 6.939 9.639 98.987

12 16.578 7.570 9.008 91.416

13 16.578 8.259 8.319 83.157

14 16.578 9.011 7.567 74.146

15 16.578 9.831 6.747 64.316

16 16.578 10.725 5.853 53.590

17 16.578 11.701 4.877 41.889

18 16.578 12.766 3.812 29.123

19 16.578 13.928 2.650 15.195

20 16.578 15.195 1.383 (0)

A. 16,578.03

Use the formula of the present value of annuity ordinary and solve for pmt

Pmt=pv:[ (1 - (1+r) ^ (-n)) : r]

PMT=150,261: ((1 - (1+0.091) ^ (-20)) : (0.091)) = 16,578.03