Alice owned an annuity which had level annual payments for twelve consecutive years, the first of...
Alice owned an annuity which had level annual payments for twelve consecutive years, the first of these being in exactly twelve years. She sold it, and the selling price of $24,826.72 was based on a yield rate for the investor of 7.4%. What is the amount of the level payments? Round your answer to the nearest cent.
Answer in units of dollars. Your answer must be within ± 0.0%
Homework Answers
Present Value = $24,826.72
Interest Rate = 7.4%
Calculating Value at Year 11,
Value = 24,826.72(1.074)11
Value = $54,446.06
Calculating Level Payment for 12 years,
Using TVM Calculation,
PMT = [PV = 54,446.06, N = 12, I = 0.074, FV = 0]
PMT = $7001.73
Annual Payment = $7,001.73
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