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Your uncle is about to retire, and he wants to buy an annuity that will provide...

Your uncle is about to retire, and he wants to buy an annuity that will provide him with $6,300 of income a year for 23 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today?

Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.

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Answer #1

Calculation:

PMT = 6,300

N = 23

R = 0.0525

PV = PV(0.0525,23,-6300,,1)

Therefore answer is 87,369.05

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