# An annuity providing a rate of return of 5.6% compounded quarterly was purchased for $27,000. The annuity

## Question:

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?

Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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