Question

Exercise 5-13 (Static) Solving for unknowns; annuities (LO5-9) For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n=number of years) (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) 1 IS Answer is complete but not entirely correct. Present Annuity Value Amount 11,970 S 3,000 8% 5 242,980 75,000 9% 4 161,214 20,000 15 500,000 80,518 6% 8 250,000 78,864 10% 4 2 3 9% 4. 5

Answer 1

	Present Value	Annuity Amount	i=	n=
1	$11,978	$3,000	8%	5
2	$242,980	$75,000	9%	4
3	$161,214	$20,000	9%	15
4	$500,000	$80,518	6%	8
5	$250,000	$78,868	10%	4

(1) Annuity amount * (PVAF * 8%, 5) = Present value

= $3000 * 3.99271 = $11978

(5) Annuity amount * (PVAF * 10%, 4) = Present value

Annuity amount * 3.16987 = $250000

Annuity amount = $78868