An annuity consists of 55 payments of $3480 at the end of each month. Interest is at j, = 12 %. Find the value of this annuity at the time of the first payment 148138.95 X 2 years before the first payment 116669.22 X at the time of the last payment 3480

An annuity consists of 55 payments of $3480 at the end of each month. Interest is at j, = 12 %. Find the value of this annuity at the time of the first payment 148138.95 X 2 years before the first payment 116669.22 X at the time of the last payment 3480

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

An annuity consists of 55 payments of $3480 at the end of each month. Interest
is at j, = 12 %. Find the value of this annuity
at the time of the first payment 148138.95
2 years before the first payment 116669.22 X
at the time of the last payment 3480

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