Ms. Jorgen recently moved from Boston to Pittsburgh to take a job with OP Inc. She sold her home in Boston and OP paid the $14,5
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For compounding interest, there is a formula relating the present worth (P) with the annuity (A). This is shown in the picture. The 'i' is the effective interest rate while n is the time. You should make sure that you are consistent with the units. If your time is in terms of years, your interest should be in terms of percent per year compounded yearly. Moreover, your annuity should be per yearly basis. In this case, it is already consistent so we don't need to convert. Substituting the values,
P = 10,000[(1.08^9-1)/(0.08*1.08^9)]
P = $62,468.88
P = 10,000[(1.08^9-1)/(0.08*1.08^9)]
P = $62,468.88