FINANCIAL MATH WORD PROBLEM

harrissj1

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The future value of an annuity is A= $32,00. Periodic payments are made quarterly for four years and the annuity earns 8% compounded quarterly. Find the periodic payments.
 
harrissj1 said:
The future value of an annuity is A= $32,00. Periodic payments are made quarterly for four years and the annuity earns 8% compounded quarterly. Find the periodic payments.
P = Payment, i = interest per quarter, n = number of quarters

A = P(i) / [(1 + i)^n - 1]

Assuming you mean A = $32,000:
32000 = P(.02) / (1.02^16 - 1)

Solve for P
 
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