contestada

Find the payment that should be used for the annuity due whose future value is given. Assume that the compounding period is the same as the payment period.
​$​23,000; quarterly payments for 17 ​years; interest rate ​7.1%

Find the payment that should be used for the annuity due whose future value is given Assume that the compounding period is the same as the payment period 23000 class=

Respuesta :

Using the future value formula, it is found that the payment should be of $125.59.

What is the future value formula?

It is given by:

[tex]V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right][/tex]

In which:

  • P is the payment.
  • n is the number of payments.
  • r is the interest rate.

For this problem, the parameters are given as follows:

V = 23000, n = 17 x 4 = 68, r = 0.071/4 = 0.01775.

We solve for P to find the payment, as follows:

[tex]V(n) = P\left[\frac{(1 + r)^{n-1}}{r}\right][/tex]

[tex]23000 = P\left[\frac{(1 + 0.01775)^{67}}{0.01775}\right][/tex]

183.129P = 23000

P = 23000/183.129

P = $125.59.

The payment should be of $125.59.

More can be learned about the future value formula at https://brainly.com/question/24703884

#SPJ1

Otras preguntas