Posted by **Scott Ingraham** on Friday, April 11, 2008 at 4:56pm.

Jane forest wants to receive yearly payments of 15000.00 for 10 years. How much must she deposit at her bank today at 11% intrest compouned annually?

I have fugured it to be as follows and could someone tell me if i am right.

15000.00 Future Value

N 10x1=10

I/Y 11% / 1=11

cpt=pmt is this right or am ai fuguring it wrong here Help please

- Annuities and sicking funds -
**Damon**, Friday, April 11, 2008 at 6:17pm
P = N * [1 - (1+r)^-n]/r

P = 15,000 * [1 - (1.11)^-10]/.11

P = 88,338

equivalently

P = N * [(1+r)^n -1]/[r*(1+r)^n]

P = 15,000 [ (1.11)^10 -1 ] / [.11*(1.11)^10]

P = 15,000 [ 1.84 /.312] = 88,338

- Annuities and sicking funds -
**Damon**, Friday, April 11, 2008 at 6:25pm
Here is a link to the present value of a future annuity

http://en.wikipedia.org/wiki/Annuity_%28finance_theory%29

Look at

P \,=\,R\left[\frac{1-\frac{1}{\left(1+i\right)^n}}{i}\right] = R\cdot a_{\overline{n}|i}

- Annuities and sicking funds -
**Damon**, Friday, April 11, 2008 at 6:28pm
I figured that sicking fund was a typo, but perhaps it was in GE stock.

- Annuities and sicking funds -
**drwls**, Friday, April 11, 2008 at 6:36pm
LOL

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