Explanation Given: The value of P is $ 10000 , 6 % interest compounded annually for 15 years. Concept: “The expression for Present value of an Annuity is given below. The present value P of an annuity of payments of R dollars each, made at the end of each period for n consecutive interest periods at a rate of interest i per period is given by P = R [ 1 − ( 1 + i ) − n i ] .” Calculation: It is given that the value of P is $ 10000 and n = 15 . Now, the value of i if the payments are made at the end of each year is i = 6 % 1 . It is simplified as follows: i = 6 100 = 0.06 Therefore, the interest compounded annually is i = 0.06 . Substitute 10000 for P , 0.06 for i and 15 for n in equation P = R [ 1 − ( 1 + i ) − n i ] as follows: P = 10000 [ 1 − ( 1 + 0

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Chapter 12.2, Problem 23E

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The lump sum deposited today that will yield same amount as payment of $10,000 at the end of each year for 15 years with 6% interest rate compounded annually.

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Chapter 12.2, Problem 22E

Chapter 12.2, Problem 24E

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The lump sum deposited today that will yield same amount as payment of $ 10 , 000 at the end of each year for 15 years with 6 % interest rate compounded annually.

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The lump sum deposited today that will yield same amount as payment of $10,000 at the end of each year for 15 years with 6% interest rate compounded annually.

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