CFIN -STUDENT EDITION-ACCESS >CUSTOM<
CFIN -STUDENT EDITION-ACCESS >CUSTOM<
6th Edition
ISBN: 9780357752951
Author: BESLEY
Publisher: CENGAGE C
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Chapter 4, Problem 23PROB
Summary Introduction

W has taken loan of $50,000 at 4.2% interest rate and need to make monthly payments for 10 years.

Present value of an annuity is the current value of future payment or the present value of a series of future periodic payments made at the end of each payment period.

PVAnnuity=PMT[11(1+r)nr]

Here,

The present value of an annuity is “PVAnnuity”.

The periodic payments are “PMT”.

The interest rate is “r”.

The maturity period of number of years is “n”.

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