contestada

If you put up $48,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

anwar96iqbal

Answer:

The Annual Cash Flow will be $5,023.26.

Explanation:

Use the PV Annuity formula to calculate the Annual Cash Flow. The formula is:

PV = R *{ { 1 - [ (1 + i) ^ -n] } / i }

where

R = Annual Cash Flow.

i = Interest Rate which 6.25%.

n = Number of Periods which is 15.

and

PV = Present value OR Amount Invested which in this case is $48,000.

Simply re-arrange the formula for "R" and you will get $5,023.26.

Otras preguntas