Acme Annuities recently offered an annuity that pays 5.7% compounded monthly. What equal monthly deposit should be made into this annuity in order to have $94,000in 14 years?
OK. Start with this one: You take 5.7% and divide by 12=5.7/12 =0.475. You enter this under ir. Enter 0 under PV. Enter 94,000 under FV. Enter 14 x 12 =168 months under np. Press PMT key to get your answer.
If you are looking for a FV of 94,000, then it is CORRECT. If you want the PV of the annuity, then your question is not stated correctly. If you're looking the answer to be =$813.42, then you want the PV????
The question should be: Acme Annuities is offering a 5.7% rate on 14-year annuities. If you had $94,000 in your account, what monthly payment should you get over the 14-year period? Then 94,000 should be entered under PV, and press PMT to get your answer.
This question is stated correctly. 94,000 is a future value.
Let's convert the years into months. (12*14=168)
Now let's set up our notation.
A=F(A/F, i , n)
A=94,000(A/F, 5.7%, 168)
Now time for the formulas.
A = $0.48355 (This is the monthly deposit to achieve $94,000 in 14 years [168 months])