Problema Solution

find the value of the annuity, a=6000year I=.06year N=10 years

Answer provided by our tutors

absent any clear information, we use the following formula:

V = A[((1+r)^n)-1]/r

where 'V' is the initial value of the annuity, 'A' is the amount, 'r' is the annual rate and 'n' is the number of years


V = 6000*[((1+0.06)^10) - 1] / 0.06

V = 79084.769


The value of the annuity is approximately $79,085


Note that there are several choices of calculations that could be made, so you should check your course material for the correct formula.