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What is the price of a uniform annuity making 5 consecutive payments of $10,000 per year...

What is the price of a uniform annuity making 5 consecutive payments of $10,000 per year at a 5% annual interest rate (assume the first payment is paid out in year 1)?

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Answer #1

Information provided:

Annual payment= $10,000

Time= 5 years

Interest rate= 5%

Ordinary Annuity refers to an annuity that occurs at the end of the period.

The question is calculated by computing the present value of ordinary annuity.

Enter the below in a financial calculator to compute the present value of ordinary annuity.

PMT= 10,000

I/Y= 5

N= 5

Press the CPT key and PV to compute the present value of ordinary annuity.

The value obtained is 43,294.77.

Therefore, the price of the uniform annuity is $43,294.77.

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