Posted on January 27, 2010.
This is a problem regarding the current value of the annuity.? Justin has contributed to a pension fund for many years. If Justin wants to be able to receive $ 1,000.00 per month for 10 years, how much should be invested in the account. Assume an APR of 6%.
I used the current formula of value, but I go out with a realistic response. I think this problem must be done on a graphing calculator in which u can calculate the present or future value of an annuity.
You must use the following symbols:
N = (total number of payments, whether between strangers 0)
= I% (APR, 15% from 15 to 1.2% from 1.2 to 05% between .05 if between strangers 0)
= PV (current value, type in the amount)
= PMT (payment amount, enter a negative value to show cash flow.)
= FV (future value, type in the amount)
P / Y = (number of payments per year if between strangers 0)
C / Y = (# of time interest is compounded annually, should be the same as P / Y)
Thats the problem and the information needed to be connected to the graphing calculator. u guys can post the job and the numbers used for symbols. Thx
so if you use a calc chart, then
N = 120, for 12 months * 10 years
I = 6, do not put in 0.06
PV = Present Value is what you want to solve
PMT = 1000
FV = future value, you want 0
P / Y are both 12
C / Y
