Question

Abby Mia wants to know how much must be deposited in her local bank today so that she will receive yearly payments of $18,000 for 20 years at a current rate of 9% compounded annually. (Use the tables found in the textbook.)

Answer 1

We are not given tables, so will just use the amortization formula.
$P=\frac{A*((1+i)^n-1)}{i*(1+i)^n}$
where 
P=amount to be deposited today, to be found
A=amount withdrawn each year=18000
i=Annual interest=9%
n=number of years = 20

Substituting values,
$P=\frac{A*((1+i)^n-1)}{i*(1+i)^n}$
$=\frac{18000*((1+0.09)^{20}-1)}{0.09*(1+0.09)^{20}}$
=164313.82   to the nearest cent