Question

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 don't 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 don't think that is right HELP

Answer 1

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 = ?

Answer 2

thanks that helped