document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1088298>Question 1088298</A>: <I><SPAN STYLE=\"word-break: break-all;\"> #12: Find the payment that should be used for the annuity due whose future value is given. Assume the compounding period is the same as the payment period. $12,000; quarterly payments for 14 years; interest rate 7.2% </SPAN>\n" );
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document.write( "Find the payment that should be used for the annuity due whose future value is given. Assume the compounding period is the same as the payment period. $12,000; quarterly payments for 14 years; interest rate 7.2%<BR>\n" );
document.write( " <BR>\n" );
document.write( "Solution:<BR>\n" );
document.write( "The future value of quarterly payments of $12000 for 14 years at 7.2% <BR>\n" );
document.write( "F=120000((1+0.072/4)^(4*14)-1)/(0.072/4)<BR>\n" );
document.write( "=1143774.05\r<BR>\n" );
document.write( "\n" );
document.write( "Initial deposit to contract the quarterly payments <BR>\n" );
document.write( "P=F/(1+.072/4)^(4*14)<BR>\n" );
document.write( "=1143774.05/(1.018^(56))<BR>\n" );
document.write( "=194136.30\r<BR>\n" );
document.write( "\n" );
document.write( "$194136.30 is required to purchase the annuity that pays $120000 quarterly for the next 14 years. </SPAN>\n" );
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