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A company has just received a huge donation. It would like to make payments for its...

A company has just received a huge donation. It would like to make payments for its insurance for three years in advance. Previously, it has paid $100 in premiums every week. Assuming interest rate of 10%, what single sum of money should it pay?    (Note: the insurance payments are due at the beginning of the period of coverage, and compounding weekly). This is annuity due.

a. 12,316.987

b. 10,051.421

c. 13,492.249

d. 15,118.687

e. 14,381.746

Solutions

Expert Solution

Interest Rate = 10%

Weekly Payment = $100

Time Period = 3 years

Calculating Present Value,

Using TVM Calculation,

PV = BEG[FV = 0, PMT = 100, N = 156, I = 0.10/12]

PV = $13,492.249

jeff jeffy answered 2 years ago
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