Sammy has an annuity that pays him $9600 at the beginning of each year. Assume the economy will grow at a rate of 3.1% annually. What is the value of the annuity if he received it now instead of over a period of 10 years?

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jim_thompson5910 · Answer

I'm not 100% sure, but I think you use the formula listed on this page http://www.investopedia.com/terms/p/present-value-annuity.asp which is PV = C * [( 1 - (1+i)^(-n) )/i] ---------------------------- In this case C = 9600 i = 0.031 n = 10