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

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

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}

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

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

To calculate the present value of the future payments, you can use the Present Value (PV) function on a financial calculator. Here's how you can calculate it:

1. Determine the future value (FV) of the yearly payments. In this case, it's $15,000.

2. Determine the number of years (N) the payments will be received. In this case, it's 10 years.

3. Determine the annual interest rate (I/Y) as a decimal. In this case, it's 11% or 0.11.

4. Set the payment (PMT) to 0 since Jane will be receiving the payment, not making it.

5. Calculate the present value (PV) using the formula: PV = FV / (1 + r)^n

Using these inputs, the equation will be: PV = $15,000 / (1 + 0.11)^10.

Calculating this equation will give you the amount Jane must deposit at her bank today to receive yearly payments of $15,000 for 10 years at 11% interest compounded annually.

Alternatively, you can also use financial software or online calculators that have a present value function to simplify the calculation process.