How much of an initial investment would you need to make

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Reference no: EM131984965

Similar to a savings account, an annuity is something that is generally planned for retirement purposes.

It Is essentially a savings account that accumulates interest (based on the amount present) and allows the investor to withdraw a fixed amount each month until the account is depleted.

Assuming that the annuity has a 1 % monthly interest rate and that we wish to make a monthly withdrawal of $1000 (after the compounding of interest), what should your initial investment be if you want the account to remain fixed over time? $

How much of an initial investment would you need to make if you were only concerned about the annuity lasting for 20 years before depleting? $ In the scenario just discussed, what would be the net benefit (total withdrawn - total invested) to you over the life of the annuity? $

Reference no: EM131984965

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