Madeline has an annuity that pays $7902 at the beginning of a time twice a year. If the economy grows at a rate of 3.1% twice a year what is the value of the annuity if she received it in a lump sum now rather than over a period of 16 years? (show work)

A = $198,170.44

B = $201,242.08

C = $158,941.50

Question

Ben Bird

28 September, 07:20

+2

Answers (1)

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Howard Cannon · Answer 1

See the equation of the present value on annuity due

Pvad=7,902 * ((1 - (1+0.031:2) ^ (-2*16)) : (0.031:2)) * (1+0.031:2) = 201,242.08

Madeline has an annuity that pays $7902 at the beginning of a time twice a year. If the economy grows at a rate of 3.1% twice a year what is the value of the annuity if she received it in a lump sum now rather than over a period of 16 years? (show work)A = $198,170.44B = $201,242.08C = $158,941.50