If $60,000 is paid at the end of each year for 13 years, calculate the equivalent...

If $60,000 is paid at the end of each year for 13 years, calculate the equivalent single payment now (P) if interest is 9% pa effective. Give your answer in dollars and cents to the nearest cent.

Expert Solution

Given:				Years	Discouting factor
Annual amount=	$60,000			1	0.9174	(1/1.09)^1
*Equivalent single payment= 600007.4869**	2	0.8417	(1/1.09)^2
=	449,214			3	0.7722	(1/1.09)^3
				4	0.7084	(1/1.09)^4
				5	0.6499	(1/1.09)^5
				6	0.5963	(1/1.09)^6
				7	0.5470	(1/1.09)^7
				8	0.5019	(1/1.09)^8
				9	0.4604	(1/1.09)^9
				10	0.4224	(1/1.09)^10
				11	0.3875	(1/1.09)^11
				12	0.3555	(1/1.09)^12
				13	0.3262	(1/1.09)^13
				Annuity factor	7.4869

jeff jeffy answered 2 years ago

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