What amount must be set aside now to generate payments of $40,000 at the beginning of each year for the next 11 years if money is worth 5.33%, compounded annually? (Round your answer to the nearest cent.)

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What amount must be set aside now to generate payments of $40,000 at the beginning of each year for the next 11 years if money is worth 5.33%, compounded annually? (Round your answer to the nearest cent.)

1 Answer

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Darshita6.14K 0 Comments

Answer : $ 343978.8

Working notes for the above answer is as follow

40,000 installnet at the beginiig of the each year

11        n

5.33     i

0          PMT

PV       =          $343978.8

Year Installment Factor@ 5.33
1 40000 1 40000
2 40000 0.949397133 37975.89
3 40000 0.901354916 36054.2
4 40000 0.855743773 34229.75
5 40000 0.812440684 32497.63
6 40000 0.771328856 30853.15
7 40000 0.732297405 29291.9
8 40000 0.695241056 27809.64
9 40000 0.660059865 26402.39
10 40000 0.626658944 25066.36
11 40000 0.594948204 23797.93
343978.8

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