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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