Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana's monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent.

Question

Ali

Mathematics

3 November, 05:42

Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana's monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent.

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Ronnie Blevins · Answer 1

Ana's total income = (monthly pensionx12x10) + Ana's IRA

IRA amortization = P[ (r (1+r) ^n) / ((1+r) ^n-1)

r = 2.3% or. 023/12 =.001916

n = 15years * 12 month/year = 180 payments

Ana's IRA = $34,760.30

Anna's total income = ($1562.32x12x10) + $34760.30

= $535081.4