Answer:
8,031.94
Explanation:
this problem can be solved first calculating the future value of the condo, so we can use the next formula:
[tex]FV=PV*(1+i)^{n}[/tex]
where FV is future value, PV is the present value, i is the periodic interest rate and n is the number of periods. So applying to this particular problem we have:
[tex]FV=100,000*(1+0.025)^{10}[/tex]
[tex]FV=128,008[/tex]
now we must apply the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:
[tex]s_{n} =P*\frac{(1+i)^{n}-1 }{i}[/tex]
where [tex]s_{n}[/tex] is the future value of the annuity, [tex]i[/tex] is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so:
[tex]128,008 =P*\frac{(1+0.1)^{10}-1 }{0.1}[/tex]
Solving P we have:
P=8,031.94
