Question

BE 6-10 deferred annuity Refer to the situation described in BE 6-8. What amount did Canliss borrow assuming that the first of the five annual $10,000 payments was not due for three years?

BE 6-10 deferred annuity Refer to the situation described in BE 6-8. What amount did Canliss borrow assuming that the first of the five annual $10,000 payments was not due for three years?

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BE 6-10 deferred annuity Refer to the situation described in BE 6-8. What amount did Canliss borrow assuming that the first of the five annual $10,000 payments was not due for three years?

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here's the required infos

Answer 1

Requirement BE 6-8 Year Payment PVIF at 7% DCF $ 10,000 0.93458 9,346 2 $ 10,000 0.87344 $ 8,734 3 $ 10,000 0.81630 $ 8,163 4 $ 10,000 0.76290 $ 7,629 5 $ 10,000 0.71299 $ 7,130 Total $ 41,002 Conclusion Amount borrowed is $ 41,002; if payment is made beginning from one year from now. Requirement BE 6-9 Payment PVIF at 7% DCF 0 $ 10,000 1.00000 $ 10,000 $ 10,000 0.93458 9,346 2 $ 10,000 0.87344 $ 8,734 3 $ 10,000 0.81630 $ 8,163 $ 10,000 0.76290 7,629 Total $ 43,872 Conclusion Amount borrowed is $ 43,872; if payment is made beginning from now. $ Requirement BE 6-10 Year Payment PVIF at 7% DCF 3 $ 10,000 0.81630 $ 8,163 $ 10,000 0.76290 $ 7,629 $ 10,000 0.71299 7,130 6 $ 10,000 0.66635 $ 6,664 7 $ 10,000 0.62276 $ 6,228 Total $ 35,814 Conclusion Amount borrowed is $ 35,814; if payment is made after 3 years from now.