Answer:
n = 121
Step-by-step explanation:
Given,
Amount invested = $250,000
Quarterly payment (P) = $5500
Interest Rate (Quarterly) (r) = 8% /4 = 2%
Account balance = $ 0
Present value of Annuity formula ,
Present value = [tex]P\times\dfrac{1-(1+r)^{-n}}{r}[/tex]
[tex]250000 = 5500\times\dfrac{1-(1+0.02)^{-n}}{0.02}[/tex]
1.02⁻ⁿ = 0.091
-n ln(1.02) = ln (0.091)
n = 121
Hence it will take 121 Quarters to account balance $0.
