Question

what amount of money must be invested today in order to receive an $18000 annuity for 5 years semiannually at a 10%annual interest rate​

Answer 1

Answer:

$224,320.00

Explanation:

PVA  =  A  × 1 - (1 + r)^-n  

                                             r

Where PVA =

A =$18,000

r =10 %  per year or 0.05 semi annually

n=10

PVA = $18,000 x 1 -( 1+0.05)^ -20

    0.05

PVA =$18,000 x (1 -0.376889)

    0.05

PVA= $18,000 x (0.62311/0.05)

PVA= $18,000 x 12.46222

PVA = $224,319.96

PVA= $224,320.00