this is a problem regarding present value of annuity.?
Justin has been contributing to a retirement fund for several years. If Justin wants to be able to receive $1000.00 a month for 10 years, what sum would have to be invested in the account. Assume an APR of 6%. I used the present Value formula but I come out with an unrealistic answer. I believe this problem must be done on a Graphing Calculator in which u can calculate the Present/Future Value of an annuity. You must use these symbols: N=(total # of payments,if unknown enter 0) I%= (APR, for 15% enter 15, for 1.2% enter 1.2, for .05% enter .05, if unknown enter 0) PV= (Present Value,type in amount) PMT= (Payment amount, enter as a negative value to show cash flow out.) FV=(Future Value, type in amount) P/Y= ( # of payments per year, if unknown enter 0) C/Y= (# of time interest is compounded per year, should be the same as P/Y) Thats the problem and the info needed to be plugged into the Graphing calculator. Can u guys post the work and the numbers used for the symbols. Thx
Public Comments
- well if you are using a graphing calc, then N=120 because 12 months * 10 years I=6, do not put in 0.06 PV = present value which is what you want to solve PMT = 1000 FV = future value, you want 0 P/Y are both set at 12 C/Y
