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    Time Value of Money Questions

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    6) A 10-year annual annuity due with the first payment occurring at date t=7 has a current value of $50 000. If the discount rate is 13% per year, what is the annuity payment amount?

    7) You currently owe a finance company $6700 that you would like to pay back over the next 24 months (payments will be made at the end of the month.) The finance company is charging you 16% interest compounded quarterly. How much will your monthly payments be?

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    6) A 10-year annual annuity due with the first payment occurring at date t=7 has a current value of $50 000. If the discount rate is 13% per year, what is the annuity payment amount?

    Year
    0 1 2 3 4 5 6 7 8 9 10

    50,000 X X X X

    Equation for present annual annuity due,

    PVA = W x 1 - 1 ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the annuity payment amount and how much will your monthly payments be.

    $2.19

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