8. Jane Evans receives payments of $900 at the beginning of each month from a pension fund of $72 500. Interest earned by the fund is 6.3% compounded monthly. a. What is the number of payments Jane will receive? b. What is the size of the final payment?

8. Jane Evans receives payments of $900 at the beginning of each month from a pension fund of $72 500. Interest earned by the fund is 6.3% compounded monthly. a. What is the number of payments Jane will receive? b. What is the size of the final payment?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 15E

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

8. Jane Evans receives payments of $900 at the beginning of each month from a pension fund of
$72 500. Interest earned by the fund is 6.3% compounded monthly.
a. What is the number of payments Jane will receive?
b. What is the size of the final payment?

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