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liubo4ka [24]
3 years ago
12

What is the present value of $900 annuity payment over 6 years if interest rates are 10%

Business
1 answer:
Rudik [331]3 years ago
8 0

Answer:

$ 508.03

Explanation:

To calculate present value of an annuity, N, we can use the formula;

N=\frac{A}{(1+r)^n}

From the question, the future value of the annuity is A=$900, the percentageW interest rate per compounding period is r=10%=0.1, and the number of deposit to be made in the annuity is n=6

We plug the values into the formula to get:

N=\frac{900}{(1+0.1)^6} =  \frac{900}{1.1^{6} }  = 508.03

Therefore the present value is $508.03

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