Question

r each of the following annuities, calculate the annual cash flow. (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Cash Flow				Present Value			Interest Rate				Years
	$			$	32,300			9	%				6
	$				29,500			7					8
	$				158,000			12					19
	$				228,900			11					23

Answer 1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

a.32,300=Annuity[1-(1.09)^-6]/0.09

32,300=Annuity*4.48591859

Annuity=32,300/4.48591859

=$7200.31(Approx)

b.29,500=Annuity[1-(1.07)^-8]/0.07

29,500=Annuity*5.97129851

Annuity=29,500/5.97129851

=$4940.3(Approx)

c.158,000=Annuity[1-(1.12)^-19]/0.12

158,000=Annuity*7.36577686

Annuity=158,000/7.36577686

=$21450.55(Approx)

d.228,900=Annuity[1-(1.11)^-23]/0.11

228,900=Annuity*8.2664316

Annuity=228,900/8.2664316

=$27690.30(Approx)