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When abby reaches age of 55, she will deposit $50,000 to fund an annuity with the Dallas cowboys insurance company. The money will be invested at 8% each year, compounded semiannually. She is ro draw payments until she reaches age 65. What is the amount of each payment?

Answer :

Answer:

The Amount draw from the account after 10 years is $109,555 .

Step-by-step explanation:

Given as :

The principal deposited in account = p = $50,000

The rate of interest = 8% semiannually

The time period for the amount will be in account = t = 10 years

Let The Amount draw from the account after 10 years = $A

Now, From Compound Interest method

Amount = principal × [tex](1+\dfrac{\texrm rate}{2\times 100})^{\textrm 2\times time}[/tex]

A = p × [tex](1+\dfrac{\texrm r}{2\times 100})^{\textrm 2\times t}[/tex]

Or, A = $50,000 × [tex](1+\dfrac{\texrm 8}{2\times 100})^{\textrm 2\times 10}[/tex]

Or, A = $50,000 × [tex](1.04)^{20}[/tex]

Or, A = $50,000 × 2.1911

Or, A = $109,555

So, The Amount draw from the account after 10 years = A = $109,555

Hence,The Amount draw from the account after 10 years is $109,555 . Answer

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