Answered

Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Consider the case of the following annuities, and the need to compute either their expected rate of return or duration. Ryan inherited an annuity worth $3,280.16 from his uncle. The annuity will pay him five equal payments of $800 at the end of each year. The annuity fund is offering a return of

Sagot :

jepessoa

Answer:

7%

Explanation:

present value of an annuity = annual payment x PV annuity factor

PV annuity factor = $3,280.16 / $800 = 4.1002

using an annuity table, given 5 periods and the factor value, the i = 7%

you could also calculate it by solving:

4.1002 = [1 - 1/(1 + i)ⁿ ] / i

but it is much longer and difficult than just looking at a table

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.