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Exercise 9-4 Parker is planning for his retirement this year. One option that has been presented...

Exercise 9-4

Parker is planning for his retirement this year. One option that has been presented to him is the purchase of an annuity that would provide a $49,000 payment each year for the next 17 years.

Click here to view the factor table.

Calculate how much Parker should be willing to pay for the annuity if he can invest his funds at 9%. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)

Annuity Payment $

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Answer #1

B3 A B annual payment he shall receive present value annuity factor (9%, 17 periods) annuity payment $ 49,000 8.5436 $ 418,63

for formulas and calculations, refer to the image below -

А в m+ in annual payment he shall receive 49000 present value annuity factor (9%, 17 periods) =ROUND(-PV(9%,17,1),4) annuity

In case you have any query, kindly ask in comments.

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