Homework question help needed

Accounting
Tutor: None Selected Time limit: 1 Day

5-year regular annuity has a present value of $1,000, and if the interest rate is 10%, what is the amount of each annuity payment?

Jun 24th, 2015

Thank you for the opportunity to help you with your question! Hi, He observes that work expands so as to fill the time available for its completion.

Hi,

Below is the solution

Time = 5 years

Present value =$1000

interest rate =10%

therefore

Pv=C*(1-(1+i)^-n)/i)

1000=C*(1-(1+0.1)^-5/0.1)

1000=C*1-0.621/0.1

1000=3.79C

C=263.85

each annuity will be

$263.85

thanks.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 24th, 2015

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Jun 24th, 2015
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Jun 24th, 2015
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