Question

Math of Finance Annuities

A) Allison purchased an annuity that provided her with payments

of 1000 every month for 25 years at 4.5% compounded monthly

i) how much did she pay for the annuity

ii) what was the total amount of money received from the annuity and how much of this amount was the interest earned

B) A company buys a computer for 30000 and pays $5000 down and $5000 at the end of each year. If interest is at 10% annually, how many full payments must the company make and what will be the size of the concluding smaller payment?

Answer 1

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