Homework Answers
| We need to calculate the present value of the annuity | ||||||
| = P [1-(1+r)^-n]/r | ||||||
| Where, | ||||||
| r= interest rate per period = 0.075 | ||||||
| P= periodic payment i.e. $3000 | ||||||
| n= number of period i.e. 15 Years | ||||||
| =3000 [1-(1+0.075)^-15]/0.075 | ||||||
| =$3000[1-0.337966}/0.075 | ||||||
| =$26481.36 | ||||||
| Therefore he will get $26481.36 | ||||||
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