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30 July, 18:57

Uptown Insurance offers an annuity due with semi-annual payments for 25 years at 6 percent interest. The annuity costs $200,000 today. What is the amount of each annuity payment?

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  1. 30 July, 20:42
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    PMT = $7,773

    Explanation:

    n = 25 years = 50 payments (since the annuity due with semi-annual payments)

    i/r = 6% annually = 3% semi-annually

    PV = 200,000 (given)

    FV = 0 (No future value at end of 25th year is given)

    PMT = ? (THis is the missing value we need to calculate - the amount of annuity payment)

    Using financial calculator, we have:

    PMT = $7,773
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Home » Business » Uptown Insurance offers an annuity due with semi-annual payments for 25 years at 6 percent interest. The annuity costs $200,000 today. What is the amount of each annuity payment?
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