Question

Martina plans to retire in 5 years. She plans to collect annual payments of $49,100 for several years. Her first annual payment is expected to be received in 5 years and her last annual payment is expected in 11 years. She can earn 12.99 percent per year. How much money does Martina expect to have in 5 years?

Answer 1

Calculation of amount of money does Martina expect to have in 5 years
Year	Payment	Discount factor @ 12.99%	Present Value
5th	$49,100.00	1.000000	$49,100.00
6th	$49,100.00	0.885034	$43,455.17
7th	$49,100.00	0.783285	$38,459.31
8th	$49,100.00	0.693234	$34,037.80
9th	$49,100.00	0.613536	$30,124.61
10th	$49,100.00	0.543000	$26,661.31
11th	$49,100.00	0.480574	$23,596.17
Amount of money does Martina expect to have in 5 years			$245,434.37