Homework Help: Annuities

Posted by Scott Ingraham on Saturday, April 12, 2008 at 8:35am.

Jany frost wants to receive yearly payments of 15000 for 10 years. How much must she deposti at her bank today at 11% intrest compounded annually? This is what i got here and i dont think it is right. Please can anyone help me out here. 15000 n= 10x1=10 i/y=11/1=11 compute pmt=897.02 and i dont think that is right HELP

Annuities - tchrwill, Saturday, April 12, 2008 at 9:04am
The amount that must be paid (Present Value)for an annuity with a periodic payment of $15,000 to be made at the end of each year for 10 years, at an interest rate of 11% compounded annually derives from
P = R[1-(1+i)^(-n)]/i where P = the present value, R = the periodic payment, n = the number of payment periods and i = the decimal interest paid per period.

Therefore, P = 15,000[1-(1.11)^-10]/.11 = ?
- Annuities - Scott Ingraham, Saturday, April 12, 2008 at 9:16am
  thanks that helped

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