A person establishes a sinking fund for retirement by contributing $7,500 per year at the end of each year for 20 years. For the next 20 years equal payments are withdrawn, at the end of which time the account will have a zero balabce.If the money is worth 9% compound annually,what yearly payments will the person receive for the last 20 years?

Solution:

Yearly payment is X

20X = 7500+7500*(1+9%)+7500*(1+9%)^2+...+7500*(1+9%)^19

20X = 383700.9

X = 19185.04

So the Yearly payment the person receive us $19185.04