An Annuity Providing a Rate of Return of 5

question 121

Essay

An annuity providing a rate of return of 5.6% compounded quarterly was purchased for $27,000. The annuity pays $800 at the end of each quarter (except for a smaller final payment).
a) How much of the sixteenth payment is interest?
b) What is the principal portion of the thirty-third payment?
c) What is the total interest in Payments 20 to 25 inclusive?
d) How much will the principal be reduced by payments in the sixth year?
e) What will be the final payment?

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Definitions:

Ethical Business Practices

Behaviors and decisions within a business context that are guided by a set of moral principles and standards.

Unethical Organizational Cultures

Refers to organizational environments that foster unethical practices and behaviors by prioritizing success over ethical standards.

Unity

The state or quality of being united or joined as a whole, especially in a purpose, goal, or effort.

Organizational Culture

The shared values, beliefs, norms, and practices that shape the social and psychological environment of a business organization.