   Chapter 12.II, Problem 19RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Solve the following exercises by using formulas.Present value of an ordinary annuity AnnuityPayment PaymentFrequency TimePeriod (yrs) Nominal Rate ( % ) InterestCompounded Present Value of the Annuity 19. $950 every year 8 2.9 annually To determine To calculate: The present value of an ordinary annuities, where annuity payment is$950, the frequency of payment is 1 year, the time duration is 8 years, the nominal rate of return is 2.9% and interest is compounded annually.

Explanation

Given Information:

Annuity payment is $950, the frequency of payment is 1 year, the time duration is 8 years, the nominal rate of return is 2.9% and interest is compounded annually. Formula used: The formula for the calculation of present value of an ordinary annuities is as, PV=Pmt×1(1+i)ni Where, PV is present value, Pmt is annuity payment, i is interest rate per period and n is number of periods. Calculation: Consider the provided information, Annuity payment is$950, the frequency of payment is 1 year, the time duration is 8 years, the nominal rate of return is 2.9% and interest is compounded annually.

Now, the interest rate per period is 2.9%(2.9%÷1 period per year).

The number of periods is 8(8 years×1 period per year).

Now, substitute n=8, i=0

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

#### Find more solutions based on key concepts 