Title: Cash value for lease Post by: savmoore on Apr 15, 2019
HELP! What is the cash value of a lease requiring payments of $990 at the beginning of every three months three months for 77 years, if interest is 3 %3% compounded semi dash annually question mark semi-annually?
Title: Re: Cash value for lease Post by: bio_man on Apr 16, 2019
HELP! What is the cash value of a lease requiring payments of $990 at the beginning of every three months three months for 77 years, if interest is 3 %3% compounded semi dash annually question mark semi-annually? Use the formula for annuity. \(A=\frac{R\left[\left(1+i\right)^n-1\right]}{i}\) \(A\) = future value amount → what we're looking for! \(R\) = regular deposit/payment → 990 \(i\) = interest rate per compounding period → 0.03/2 = 0.015 \(n\) = total number of deposits → 4 (every three months suggests four periods per year) * 77 = 308 \(A=\frac{990\left[\left(1+\frac{0.03}{2}\right)^{308}-1\right]}{\frac{0.03}{2}}=6 406 692.10\) I arrive to this number: $6 406 692.10 (please double-check the calculation using your calculator!) |