Chapter 13.4, Problem 29E

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4th Edition

James Stewart + 2 others

ISBN: 9781305071742

Textbook Problem

**DISCOVER: Present Value of an Annuity**

**(a) **Draw a timeline as in Example 1 to show that the present value of an annuity is the sum of the present values of each payment, that is,

**(b) **Use part (a) to derive the formula for

To determine

(a)

**To show:**

The present value of an annuity is the sum of the present values of each payment, that is,

Explanation

**Given:**

Timeline for individual payments.

**Approach:**

Present value of an annuity

**Calculation:**

Substitute,

To determine

(b)

The formula for

Sect-13.1 P-1ESect-13.1 P-2ESect-13.1 P-3ESect-13.1 P-4ESect-13.1 P-5ESect-13.1 P-6ESect-13.1 P-7ESect-13.1 P-8ESect-13.1 P-9ESect-13.1 P-10E

Sect-13.1 P-11ESect-13.1 P-12ESect-13.1 P-13ESect-13.1 P-14ESect-13.1 P-15ESect-13.1 P-16ESect-13.1 P-17ESect-13.1 P-18ESect-13.1 P-19ESect-13.1 P-20ESect-13.1 P-21ESect-13.1 P-22ESect-13.1 P-23ESect-13.1 P-24ESect-13.1 P-25ESect-13.1 P-26ESect-13.1 P-27ESect-13.1 P-28ESect-13.1 P-29ESect-13.1 P-30ESect-13.1 P-31ESect-13.1 P-32ESect-13.1 P-33ESect-13.1 P-34ESect-13.1 P-35ESect-13.1 P-36ESect-13.1 P-37ESect-13.1 P-38ESect-13.1 P-39ESect-13.1 P-40ESect-13.1 P-41ESect-13.1 P-42ESect-13.1 P-43ESect-13.1 P-44ESect-13.1 P-45ESect-13.1 P-46ESect-13.1 P-47ESect-13.1 P-48ESect-13.1 P-49ESect-13.1 P-50ESect-13.1 P-51ESect-13.1 P-52ESect-13.1 P-53ESect-13.1 P-54ESect-13.1 P-55ESect-13.1 P-56ESect-13.1 P-57ESect-13.1 P-58ESect-13.1 P-59ESect-13.1 P-60ESect-13.1 P-61ESect-13.1 P-62ESect-13.1 P-63ESect-13.1 P-64ESect-13.1 P-65ESect-13.1 P-66ESect-13.1 P-67ESect-13.1 P-68ESect-13.1 P-69ESect-13.1 P-70ESect-13.1 P-71ESect-13.1 P-72ESect-13.1 P-73ESect-13.1 P-74ESect-13.1 P-75ESect-13.1 P-76ESect-13.1 P-77ESect-13.1 P-78ESect-13.1 P-79ESect-13.1 P-80ESect-13.1 P-81ESect-13.1 P-82ESect-13.1 P-83ESect-13.1 P-84ESect-13.1 P-85ESect-13.1 P-86ESect-13.1 P-87ESect-13.1 P-88ESect-13.2 P-1ESect-13.2 P-2ESect-13.2 P-3ESect-13.2 P-4ESect-13.2 P-5ESect-13.2 P-6ESect-13.2 P-7ESect-13.2 P-8ESect-13.2 P-9ESect-13.2 P-10ESect-13.2 P-11ESect-13.2 P-12ESect-13.2 P-13ESect-13.2 P-14ESect-13.2 P-15ESect-13.2 P-16ESect-13.2 P-17ESect-13.2 P-18ESect-13.2 P-19ESect-13.2 P-20ESect-13.2 P-21ESect-13.2 P-22ESect-13.2 P-23ESect-13.2 P-24ESect-13.2 P-25ESect-13.2 P-26ESect-13.2 P-27ESect-13.2 P-28ESect-13.2 P-29ESect-13.2 P-30ESect-13.2 P-31ESect-13.2 P-32ESect-13.2 P-33ESect-13.2 P-34ESect-13.2 P-35ESect-13.2 P-36ESect-13.2 P-37ESect-13.2 P-38ESect-13.2 P-39ESect-13.2 P-40ESect-13.2 P-41ESect-13.2 P-42ESect-13.2 P-43ESect-13.2 P-44ESect-13.2 P-45ESect-13.2 P-46ESect-13.2 P-47ESect-13.2 P-48ESect-13.2 P-49ESect-13.2 P-50ESect-13.2 P-51ESect-13.2 P-52ESect-13.2 P-53ESect-13.2 P-54ESect-13.2 P-55ESect-13.2 P-56ESect-13.2 P-57ESect-13.2 P-58ESect-13.2 P-59ESect-13.2 P-60ESect-13.2 P-61ESect-13.2 P-62ESect-13.2 P-63ESect-13.2 P-64ESect-13.2 P-65ESect-13.2 P-66ESect-13.2 P-67ESect-13.2 P-68ESect-13.2 P-69ESect-13.2 P-70ESect-13.2 P-71ESect-13.2 P-72ESect-13.2 P-73ESect-13.2 P-74ESect-13.2 P-75ESect-13.2 P-76ESect-13.2 P-77ESect-13.2 P-78ESect-13.3 P-1ESect-13.3 P-2ESect-13.3 P-3ESect-13.3 P-4ESect-13.3 P-5ESect-13.3 P-6ESect-13.3 P-7ESect-13.3 P-8ESect-13.3 P-9ESect-13.3 P-10ESect-13.3 P-11ESect-13.3 P-12ESect-13.3 P-13ESect-13.3 P-14ESect-13.3 P-15ESect-13.3 P-16ESect-13.3 P-17ESect-13.3 P-18ESect-13.3 P-19ESect-13.3 P-20ESect-13.3 P-21ESect-13.3 P-22ESect-13.3 P-23ESect-13.3 P-24ESect-13.3 P-25ESect-13.3 P-26ESect-13.3 P-27ESect-13.3 P-28ESect-13.3 P-29ESect-13.3 P-30ESect-13.3 P-31ESect-13.3 P-32ESect-13.3 P-33ESect-13.3 P-34ESect-13.3 P-35ESect-13.3 P-36ESect-13.3 P-37ESect-13.3 P-38ESect-13.3 P-39ESect-13.3 P-40ESect-13.3 P-41ESect-13.3 P-42ESect-13.3 P-43ESect-13.3 P-44ESect-13.3 P-45ESect-13.3 P-46ESect-13.3 P-47ESect-13.3 P-48ESect-13.3 P-49ESect-13.3 P-50ESect-13.3 P-51ESect-13.3 P-52ESect-13.3 P-53ESect-13.3 P-54ESect-13.3 P-55ESect-13.3 P-56ESect-13.3 P-57ESect-13.3 P-58ESect-13.3 P-59ESect-13.3 P-60ESect-13.3 P-61ESect-13.3 P-62ESect-13.3 P-63ESect-13.3 P-64ESect-13.3 P-65ESect-13.3 P-66ESect-13.3 P-67ESect-13.3 P-68ESect-13.3 P-69ESect-13.3 P-70ESect-13.3 P-71ESect-13.3 P-72ESect-13.3 P-73ESect-13.3 P-74ESect-13.3 P-75ESect-13.3 P-76ESect-13.3 P-77ESect-13.3 P-78ESect-13.3 P-79ESect-13.3 P-80ESect-13.3 P-81ESect-13.3 P-82ESect-13.3 P-83ESect-13.3 P-84ESect-13.3 P-85ESect-13.3 P-86ESect-13.3 P-87ESect-13.3 P-88ESect-13.3 P-89ESect-13.3 P-90ESect-13.3 P-91ESect-13.3 P-92ESect-13.3 P-93ESect-13.3 P-94ESect-13.3 P-95ESect-13.3 P-96ESect-13.3 P-97ESect-13.3 P-98ESect-13.3 P-99ESect-13.3 P-100ESect-13.3 P-101ESect-13.3 P-102ESect-13.3 P-103ESect-13.3 P-104ESect-13.4 P-1ESect-13.4 P-2ESect-13.4 P-3ESect-13.4 P-4ESect-13.4 P-5ESect-13.4 P-6ESect-13.4 P-7ESect-13.4 P-8ESect-13.4 P-9ESect-13.4 P-10ESect-13.4 P-11ESect-13.4 P-12ESect-13.4 P-13ESect-13.4 P-14ESect-13.4 P-15ESect-13.4 P-16ESect-13.4 P-17ESect-13.4 P-18ESect-13.4 P-19ESect-13.4 P-20ESect-13.4 P-21ESect-13.4 P-22ESect-13.4 P-23ESect-13.4 P-24ESect-13.4 P-25ESect-13.4 P-26ESect-13.4 P-27ESect-13.4 P-28ESect-13.4 P-29ESect-13.4 P-30ESect-13.4 P-31ESect-13.5 P-1ESect-13.5 P-2ESect-13.5 P-3ESect-13.5 P-4ESect-13.5 P-5ESect-13.5 P-6ESect-13.5 P-7ESect-13.5 P-8ESect-13.5 P-9ESect-13.5 P-10ESect-13.5 P-11ESect-13.5 P-12ESect-13.5 P-13ESect-13.5 P-14ESect-13.5 P-15ESect-13.5 P-16ESect-13.5 P-17ESect-13.5 P-18ESect-13.5 P-19ESect-13.5 P-20ESect-13.5 P-21ESect-13.5 P-22ESect-13.5 P-23ESect-13.5 P-24ESect-13.5 P-25ESect-13.5 P-26ESect-13.5 P-27ESect-13.5 P-28ESect-13.5 P-29ESect-13.5 P-30ESect-13.5 P-31ESect-13.5 P-32ESect-13.5 P-33ESect-13.5 P-34ESect-13.5 P-35ESect-13.5 P-36ESect-13.5 P-37ESect-13.5 P-38ESect-13.6 P-1ESect-13.6 P-2ESect-13.6 P-3ESect-13.6 P-4ESect-13.6 P-5ESect-13.6 P-6ESect-13.6 P-7ESect-13.6 P-8ESect-13.6 P-9ESect-13.6 P-10ESect-13.6 P-11ESect-13.6 P-12ESect-13.6 P-13ESect-13.6 P-14ESect-13.6 P-15ESect-13.6 P-16ESect-13.6 P-17ESect-13.6 P-18ESect-13.6 P-19ESect-13.6 P-20ESect-13.6 P-21ESect-13.6 P-22ESect-13.6 P-23ESect-13.6 P-24ESect-13.6 P-25ESect-13.6 P-26ESect-13.6 P-27ESect-13.6 P-28ESect-13.6 P-29ESect-13.6 P-30ESect-13.6 P-31ESect-13.6 P-32ESect-13.6 P-33ESect-13.6 P-34ESect-13.6 P-35ESect-13.6 P-36ESect-13.6 P-37ESect-13.6 P-38ESect-13.6 P-39ESect-13.6 P-40ESect-13.6 P-41ESect-13.6 P-42ESect-13.6 P-43ESect-13.6 P-44ESect-13.6 P-45ESect-13.6 P-46ESect-13.6 P-47ESect-13.6 P-48ESect-13.6 P-49ESect-13.6 P-50ESect-13.6 P-51ESect-13.6 P-52ESect-13.6 P-53ESect-13.6 P-54ESect-13.6 P-55ESect-13.6 P-56ESect-13.6 P-57ESect-13.6 P-58ESect-13.6 P-59ESect-13.CR P-1CCSect-13.CR P-2CCSect-13.CR P-3CCSect-13.CR P-4CCSect-13.CR P-5CCSect-13.CR P-6CCSect-13.CR P-7CCSect-13.CR P-8CCSect-13.CR P-9CCSect-13.CR P-10CCSect-13.CR P-11CCSect-13.CR P-12CCSect-13.CR P-1ESect-13.CR P-2ESect-13.CR P-3ESect-13.CR P-4ESect-13.CR P-5ESect-13.CR P-6ESect-13.CR P-7ESect-13.CR P-8ESect-13.CR P-9ESect-13.CR P-10ESect-13.CR P-11ESect-13.CR P-12ESect-13.CR P-13ESect-13.CR P-14ESect-13.CR P-15ESect-13.CR P-16ESect-13.CR P-17ESect-13.CR P-18ESect-13.CR P-19ESect-13.CR P-20ESect-13.CR P-21ESect-13.CR P-22ESect-13.CR P-23ESect-13.CR P-24ESect-13.CR P-25ESect-13.CR P-26ESect-13.CR P-27ESect-13.CR P-28ESect-13.CR P-29ESect-13.CR P-30ESect-13.CR P-31ESect-13.CR P-32ESect-13.CR P-33ESect-13.CR P-34ESect-13.CR P-35ESect-13.CR P-36ESect-13.CR P-37ESect-13.CR P-38ESect-13.CR P-39ESect-13.CR P-40ESect-13.CR P-41ESect-13.CR P-42ESect-13.CR P-43ESect-13.CR P-44ESect-13.CR P-45ESect-13.CR P-46ESect-13.CR P-47ESect-13.CR P-48ESect-13.CR P-49ESect-13.CR P-50ESect-13.CR P-51ESect-13.CR P-52ESect-13.CR P-53ESect-13.CR P-54ESect-13.CR P-55ESect-13.CR P-56ESect-13.CR P-57ESect-13.CR P-58ESect-13.CR P-59ESect-13.CR P-60ESect-13.CR P-61ESect-13.CR P-62ESect-13.CR P-63ESect-13.CR P-64ESect-13.CR P-65ESect-13.CR P-66ESect-13.CR P-67ESect-13.CR P-68ESect-13.CR P-69ESect-13.CR P-70ESect-13.CR P-71ESect-13.CR P-72ESect-13.CR P-73ESect-13.CR P-74ESect-13.CR P-75ESect-13.CR P-76ESect-13.CR P-77ESect-13.CR P-78ESect-13.CR P-79ESect-13.CR P-80ESect-13.CR P-81ESect-13.CR P-82ESect-13.CR P-83ESect-13.CT P-1CTSect-13.CT P-2CTSect-13.CT P-3CTSect-13.CT P-4CTSect-13.CT P-5CTSect-13.CT P-6CTSect-13.CT P-7CTSect-13.CT P-8CTSect-13.CT P-9CTSect-13.CT P-10CTSect-13.CT P-11CTSect-13.CT P-12CTSect-13.CT P-13CTSect-13.FOM P-1PSect-13.FOM P-2PSect-13.FOM P-3PSect-13.FOM P-4PSect-13.FOM P-5PSect-13.FOM P-6P