1 The annual payment is $10,000 and you will receive it for 4 years.

s. You will receive the first payment in 10 years.

You can earn 10% on your money. How much do you have to invest today?
What kind of annuity is this?

2 The annual payment is $25,000 per year for 10 years. The annuity will begin one year from today.
You can earn 8% on your money. How much do you have to invest today?
What kind of annuity is this?

3 You want to retire on $150,000 per year. You expect to be retired for 30 years. You will
begin your retirement in 20 years. You can earn 6% on your money. How much do you have to invest today?
What kind of annuity is this?

4 The annual payment is $50,000 per year and you will receive it for 10 years beginning today. You can earn
12% on your money. How much do you have to invest today?
What kind of annuity is this?

5 You will need $40,000 per year for four years to fund your daughter's college education. She will begin college
in 16 years. You can earn 5% on your money. How much do you need to invest today?
What kind of annuity is this?

6 The annual payments are $10,000 per year for 15 years. The first payment begins today. You can earn 10%
on your money. How much do you have to invest today?
What kind of annuity is this?

7 You will receive a payment of $30,000 per year for 30 years. The first payment begins a year from now. You can earn
8% on your money. How much must you invest today?
What kind of annuity is this?
1 10,000 PMT
10 I/Y
4 N
CPT PV = 31,698.65

31,698.65 FV
10 I/Y
9 N
CPT PV = 13,443.32
Deferred Annuity

2 25,000 PMT
8 I/Y
10 N
CPT PV = 167,752.03
Ordinary Annuity

3 150,000 PMT
6 I/Y
30 N
CPT PV = 2,064,724.67

2,064,724.67 FV
6 I/Y
19 N
CPT PV = 682,418.37
Deferred Annuity

4 50,000 PMT
12 I/Y
9N
CPT PV = 266,412.49
50,000.00
Present Value 316,412.49
Annuity Due

5 40,000 PMT
5 I/Y
4 N
CPT PV = 141,838.02

141,838.02 FV
5 I/Y
15 N
CPT PV = 68,226.51
Deferred Annuity

6 10,000 PMT
10 I/Y
14 N
CPT PV = 73,666.87
10,000.00
Present Value 83,666.87
Annuity Due

7 30,000 PMT
8 I/Y
30 N
CPT PV = 337,733.50
Ordinary Annuity