Nelson decides to invest $1,000,000 in a period annuity that
earns 4.8% APR compounded monthly for a period of 15
years. How much money will Nelson be paid each month?

A. $6657.38
B. $4800.00
C. $7804.00
D. $7286.94​

Answer :

Answer:

C.

Step-by-step explanation:

$7804.00

Lanuel

The amount of money that Nelson will be paid each month is equal to: C. $7804.00.

Given the following data:

  • Principal = $1,000,000.
  • APR = 4.8% = 0.048.
  • Time = 15 years.

Note: Interest rate, r = 0.048 = 0.048/12 = 0.004.

How to calculate monthly payment?

Mathematically, the monthly payment for an investment is given by this formula:

[tex]M=P(\frac{r}{1-(1+r)^{-nt}} )[/tex]

Where:

  • P is the principal.
  • r is the interest rate.
  • M is the monthly payment.
  • t is the time.
  • n is the number of times it's compounded.

Substituting the given parameters into the formula, we have;

[tex]M=1000000(\frac{0.004}{1-(1+0.004)^{-12 \times 15 }} )\\\\M=1000000(\frac{0.004}{1-(1.004)^{-180 }} )\\\\M=1000000(\frac{0.004}{1-0.487452})\\\\M=1000000(\frac{0.004}{0.512548})\\\\M=1000000 \times 0.007804[/tex]

M = $7804.00.

Read more on interest rate here: https://brainly.com/question/24341207

#SPJ2

Other Questions