Chapter AG, Problem G.23BE

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value. The present value of an amount is calculated by using the following formula:

$\text{Present value of an amount = }\frac{\text{Future value}}{{\left(1+\text{interest rate}\right)}^{\text{number of periods}}}$

To determine: The amount of the annual payment.