You want the present value of 20 payments of 5500 at the end of each quarter for 5 years
i = .08/4 = .02
n = 4(5) = 20
PV = 5500( 1 - 1.02^-20)/.02
= $89932.88
Young and Company owes bond holders $5,500 interest at the end of each quarter for the next five years. How much must they deposit now at 8% interest compounded quarterly to yield an annuity
payment of $5,500?
1 answer