personal finance concepts

posted by .

Please answer these questions:
A. After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, so there will be nothing left in the account after the final payment is made?


So I think I need to add them all up seperatly(annually), but do I multiply 11,000 by the 5% ?

  • personal finance concepts -

    You would have to multiply 11,000(1+i)^x for each year. Where i is the interest rate and x is how many years are remaining.
    11,000(1.05)^9
    11,000(1.05)^8
    11,000(1.05)^7
    etc., then add the values to find the value of annuity.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Personal Finance

    1. Joe won a lottery jackpot that will pay him $12,000 each year for the next ten years. If the market interest rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next ten …
  2. Business

    A. Joe won a lottery jackpot that will pay him $12,000 each year for the next ten years. If the market interest rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next ten …
  3. Personal Finance Concepts

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, …
  4. finanace

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, …
  5. Finance

    Please answer these questions: 1. After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much …
  6. personal finance

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming …
  7. Personal Finance Concepts

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the ,market interest rates ar currently 5%, exactly how much should the court invest today, assuming …
  8. Personal Finance

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming …
  9. Finance

    After a protracted legl case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming …
  10. personal finance

    A.After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, …

More Similar Questions