Question

Please Help!

Will Fan & Medal!

Answer 1

The economy today grows at a rate of 2.2% semiannually. Ayden has an annuity that pays $1,655 at the beginning of every six month period. What is the value of Ayden’s annuity if he receives it in a lump sum now instead of over the next 18 years?

Answer 2

PV of the annuity=?

Answer 3

I don't know.

Answer 4

Why not actually try? its obvious

Answer 5

1,655

Answer 6

good
PV of the annuity=1,655*(1 - 1.022^-36)
in the parentese those are the calculations i did for you for the amount of months. 6 x6=36 then you square it...
turn
2.2% in a deciamal

Answer 7

*decimal

Answer 8

0.022

Answer 9

PV of the annuity=1,655*(1 - 1.022^-36)/.022
now just solve

Answer 10

$40,860.16

Answer 11

Good :) thats your answer.

Answer 12

That's not an option. Don't I also need to find the lump sum amount and find the difference?

Answer 13

What are your options?

Answer 14

$47,862.22
$48,978.46
$49,517.22
$50,633.46

Answer 15

Do you know how to find the lump sum?

Answer 16

PV = FV/(1+i)^nt

Lump Sum Fromula

Answer 17

What is FV (Future Value)?

Answer 18

yep

Answer 19

FV = future value of lump sum
PV = future value of lump sum
r = interest rate per period
t = number of compounding periods

Answer 20

FV/(1+i)^nt

0.022 * 36 = 0.792
nt = 0.792

i = 0.022

What is FV?

Answer 21

Look at what i listed above...

Answer 22

1,655?

Answer 23

iyea

Answer 24

1,655/(1+0.022)^0.792 = 1626.72

40,860.16 - 1626.72 = 39233.44

Answer 25

Still not it.

Answer 26

hmmm im not sure :/ maybe @ky_lynn might know? i hope :( we have the 1st part right im not sure about the secound part

Answer 27

@k_lynn

Answer 28

I've never heard any of this before. .-.

Answer 29

T_T @Smita12 ??

Answer 30

meh kya karo isme tumlogo ka jhamela he mitalo :PP

Answer 31

Chup raho.

Answer 32

...?

Answer 33

gandi ladki X-(