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The Regular Payment of an Annuity. So far, our calculations have been determining these large “Amounts” or “Present Values” with annuities. While that.

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Presentation on theme: "The Regular Payment of an Annuity. So far, our calculations have been determining these large “Amounts” or “Present Values” with annuities. While that."— Presentation transcript:

1 The Regular Payment of an Annuity

2 So far, our calculations have been determining these large “Amounts” or “Present Values” with annuities. While that is a great place to start, and it is important for you to keep track of these total, a more “day to day” calculation involves determining the payment (R)

3 Ford F-150F-150

4 Any time you get a loan, you use the present value formula to determine the payments. PV = i = 3% (C:M) n = 5y X 12 = 60

5 70 = R[ 1 – (1.0025) -60 ] 70 = R[ ] = R How much interest? X 60 = $ – = $

6 You want to retire a millionaire! A = i = 4% N = 45 years R = ? Use the amount formula

7 Pg 430 4,6,7,8,10,14


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