The ordinary annuity is $135.40
We have given that the
P=55500$
rate(r)=5.2%
time (t)=20 years
The formula for ordinary annuity is:
[tex]P = A \times \frac{((1 + r)^n- 1)}{ r}[/tex]
Where,P - future value
r - rate
A - annuity payment
n - the number of years
Use the given value in the above formula of ordinary annuity so we get,
[tex]55000 = A ((1 + 0.052)^{20} - 1) / 0.052[/tex]
[tex]55000 = A * ((1.052)^{20} - 1) / 0.052[/tex]
[tex]55000 = A * (2.76 - 1) / 0.052[/tex]
[tex]55000 = A * 1.76 / 0.052[/tex]
[tex]55000 = A * 33.85[/tex]
[tex]A = 55000 / 33.85[/tex]
[tex]A = 1624.82[/tex]
Therefore the annual payment(A)=1624.82 and since year has 12 months, monthly payment is
[tex]1624.82 / 12 = $135.40[/tex]
Therefore we get the ordinary annuity is $135.40
To learn more about the ordinary annuity visit:
https://brainly.com/question/25792915
