An annuity with a cash value of $13,500 earns 7% compounded semi-annually. End-of-period semi-annual payments are...
An annuity with a cash value of $13,500 earns 7% compounded semi-annually. End-of-period semi-annual payments are deferred for 7 years, and then continue for 8 years. How much is the amount of each payment?
Answer: Each payment is $ _1806.86___
NOTE*: i would like to know how to get to that answer through a financial calculator in BGN MODE.
Homework Answers
| Step-1:Calculation of future value 7 Years from now | ||||||
| Future value | =fv(rate,nper,pmt,pv) | Where, | ||||
| = $ 21,852.38 | rate | = | 3.50% | |||
| nper | = | 14 | ||||
| pmt | = | 0 | ||||
| pv | = | $ -13,500 | ||||
| Step-2:Calculation of each semi annual payment | ||||||
| Semi annual payment | =pmt(rate,nper,-pv) | Where, | ||||
| = $ 1,806.86 | rate | = | 3.50% | |||
| nper | = | 16 | ||||
| pv | = | $ 21,852 | ||||
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