## Payout Annuities

### Learning Outcomes

• Calculate the balance on an annuity after a specific amount of time
• Discern between compound interest, annuity, and payout annuity given a finance scenario
• Use the loan formula to calculate loan payments, loan balance, or interest accrued on a loan
• Determine which equation to use for a given scenario
• Solve a financial application for time

## Removing Money from Annuities

In the last section you learned about annuities. In an annuity, you start with nothing, put money into an account on a regular basis, and end up with money in your account.

In this section, we will learn about a variation called a Payout Annuity. With a payout annuity, you start with money in the account, and pull money out of the account on a regular basis. Any remaining money in the account earns interest. After a fixed amount of time, the account will end up empty.

### Evaluating negative exponents on your calculator

With these problems, you need to raise numbers to negative powers.  Most calculators have a separate button for negating a number that is different than the subtraction button.  Some calculators label this (-) , some with +/- .  The button is often near the = key or the decimal point.

If your calculator displays operations on it (typically a calculator with multiline display), to calculate 1.005-240 you’d type something like:  1.005 ^ (-) 240

If your calculator only shows one value at a time, then usually you hit the (-) key after a number to negate it, so you’d hit: 1.005 yx 240 (-)  =

Give it a try – you should get 1.005-240 = 0.302096