Answered

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Calculate price of a 25-year annuity making a $60 annual payment, discounted at 5%.

Sagot :

Answer:

the price of a 25-year annuity  is $845.64

Explanation:

The computation of the price is as follows:

The price of a 25-year annuity  is

= Annual payment × ((1 - (1 + discounted rate)^(number of years)) ÷ discounted rate)

 = $60 × ((1 - (1 + 5%)^(-25)) ÷ 5%)

= $845.64

hence, the price of a 25-year annuity  is $845.64

Therefore it could be determined by applying the above formula so that the price could come

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