Question 1204351
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Think of it like a loan.


You loan the annuity company L dollars at an annual interest rate of 5%, which is roughly equivalent to the monthly rate (5%)/12 = 0.416666667%.
The timespan is 12*28 = 336 months.


The annuity company will then pay you back $3400 per month for 336 months until their balance is paid off.


Let's determine the loan amount
P = (L*i)/(1 - (1+i)^(-n))   <<---------------------------- monthly payment formula
3400 = (L*0.00416666667)/(1 - (1+0.00416666667)^(-336))
3400 = L*0.00553573951128
L = 3400/0.00553573951128
L = 614,190.749595772
L = 614,190.75
L = 614,191


If you loan the company around $614,191, then the company would pay you back payments of roughly $3400 per month for 336 months (equivalent to 28 years).


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If you want to use a TI83 or TI84 calculator, then press the APPS button. Scroll to "Finance". Then go to "TVM Solver".
TVM = time value of money


We'll have these inputs<ul><li>N = 336</li><li>I% = 5</li><li>PV = 0, but this will change later</li><li>PMT = -3400</li><li>FV = 0</li><li>P/Y = 12</li><li>C/Y = 12</li><li>PMT: END</li></ul>Go back to PV and press the button labeled "alpha", then press the "enter" at the bottom right corner. 
This will tell the calculator to solve for the PV entry. 
The 0 will change to 614190.7499 which rounds to 614191 when rounding to the nearest dollar.



Here's an emulator of the TI83 TVM solver if you want practice using it, but you forgot your calculator.
<a href="https://www.geogebra.org/m/mvv2nus2">https://www.geogebra.org/m/mvv2nus2</a>


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Want to use a spreadsheet?
The command to input would be <font color=red>=PV(0.05/12,336,-3400,0,0)</font>
The template is 
PV(rate, nPer, PMT, FV, type)
where<ul><li>rate = monthly interest rate in decimal form</li><li>nPer = number of periods = number of months in this case</li><li>PMT = payment, this value is negative to represent a cash outflow</li><li>FV = future value = 0 to mean the company's balance sheet shows $0 when the loan is paid off</li><li>type = 0 = indicates the payments are done at the end of the month</li></ul>Payments at the beginning of the month would be type = 1. If you went with this option, then it leads to $616,750 which is what you got. However, it appears that your teacher wants payments at the end of the month instead.


Don't forget about the equal sign up front or else the spreadsheet command won't execute. Instead it would be plain text.
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