The present value of the annuity is $304,744.04.
<h3>What is an annuity?</h3>
An annuity is a periodic fixed amount of money that is received periodically.
An annuity is usually a long-term insurance product that provides guaranteed income.
<h3>Formula for Present Value of Annuity:</h3>
PV = P \times \frac{1 - (1 + r)^{-n}}{r}
PV = present value of an ordinary annuity
P = value of each payment
r = interest rate per period
n = number of periods
<h3>Data and Calculations:</h3>
N (# of periods) = 72 (12 x 6)
I/Y (Interest per year) = 10%
PMT (Periodic Payment) = $2,220
FV (Future Value) = $0
Results:
PV for 6 years = $119,832.64
Sum of all periodic payments $159,840.00
Total Interest $-40,007.36
PV for 9 years = $184,911.40
Sum of all periodic payments = $239,760 ($2,220 x 108)
Total Interest $54,848.6
Total PV for 15 years = $304,744.04 ($119,832.64 + $184,911.40)
Thus, the present value of the annuity is $304,744.04.
Learn more about the Present Value of an Annuity at brainly.com/question/25792915
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