Post a New Question

Annuities and sicking funds

posted by .

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 -

    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 -

    I think you mean sinking funds and not sicking funds, although during these hard times either may be true.

  • Annuities and sicking funds -

    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 -

    I figured that sicking fund was a typo, but perhaps it was in GE stock.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Annuities

    Jane Frost wants to receive yearly payments of 15000 for 10 years. How much must she deposit at her bank today at 11% intrest compounded annually?
  2. Annuities

    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?
  3. Annuities and sicking funds

    Janet Woo decided to retire to fla. in 6 years. What amount should Janet invest today so she can withdraw 50000.00 at the end of each year for 20 years after she retires?
  4. maths

    how much must i deposit today so that i can have 4700 in tow years time if the bank pays 5% compound interest yearly
  5. Please help!

    If your bank paid simple intrest Of 4.25% compounded annually how much intrest would you earn after three years on an initial deposit of $750.
  6. Annuities

    Sanka Blunck wants to receive $8,000 each year for 20 years. How much must Sanka invest today at 4% interest compounded annually?
  7. Business math

    Jimmy wants to buy a jeep in 5 years. If his bank pays 12% interest compounded annually, what must jimmy deposit today to have 15,000 in 5 years?
  8. math

    Jeanette wishes to retire in 30 years at age 55 with retirement savings that have the purchasing power of $300,000 in today‚Äôs dollars. 1. If the rate of inflation for the next 30 years is 2% per year, how much must she accumulate …
  9. Finance

    Juan and Rachel Burpo plan to buy a time-share in six years of $16,860. In order to have adequate funds to do so, the Burpo want to make a deposit to their money market fund today. Assume that they will be able to earn an investment …
  10. Corporate Finance

    Jason's opportunity cost rate is 8 percent compounded annually. How much must he deposit in an account today if he wants to receive $5,400 at the end of each of the next 10 years?

More Similar Questions

Post a New Question