The Sum of $59 760

question 66

Essay

The sum of $59 760.00 is invested at 9.5% compounded monthly for four years. After the four years, the balance in the fund is converted into an annuity due paying annually $15 240.00. If interest on the annuity is 9.57% compounded annually, what is the term of the annuity?

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Definitions:

U.S. Dollars

The official currency of the United States, widely used as a standard of exchange in international markets.

Depreciate

A decrease in the value of an asset over time.

Standard Of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a geographic area.

Gold Standard

An economic system in which the value of a country’s paper currency is directly connected to gold.