Find the amount to be paid of a present value of 15,000 payable every three months for 10years, if the money is worth 5% compounded quarterly.

Guest Mar 14, 2022

#1**+1 **

This, I believe is an ordinary annuity

PV = C * [ 1 - (1+i)^{-}^{n} ] / i

PV = present value C = 15 000 i = interest per period = .05/4 n = periods = 4 x 10 = 40

pluggiing in these numbers shows PV = ~ $ 469904

ElectricPavlov Mar 14, 2022

#2**0 **

Hi EP: I think this is an ordinary annuity, with a PV of $15,000, from which you would receive quarterly payments @ 5% comp. quarterly for 10 x 4 ==40 quarters. If that is right, then the quarterly payments I calculate come to ==$478.82 for 10 years, or 40 quarters. However, the question is vey vague!

Guest Mar 14, 2022

edited by
Guest
Mar 14, 2022

#3**0 **

Yah.... I believe you are correct.... the wording was a bit clumsy, so I included the equation to calulate ( as you did) ...

Just put in 15000 for PV and then calculate 'C'

ElectricPavlov
Mar 14, 2022