ANNUITIES DUE First payment occurs immediately on a day to be called the present. Formulas: 1 AMOUNT 3=R, (+-4) (1 +1) 2 PRESENT VALUE A=R. (1-2) 2 +1) 3 PERIODIC PAYMENT a R = 1-(1+) 1***") (1 +0 5 (1+1)" - 1 Examples: A life insurance policy allows the option of paying your premium yearly in advance. If the monthly premium is $15, what annual premium would be equivalent at j= 12%7 A couple wants to accumulate $10,000 by December 31, 2009. They make 10 equal annual deposits starting January 1, 2000. If interest is at j=12%, what annual deposit is needed? What equal payment at the beginning of each year for 12 years will discharge a debt of $9,000 due now, if money is worth 897 Dr. Ebrahim makes a monthly deposit of $3,500 in a time deposit which pays 12% compounded monthly. How much is in his account at the end of 5 years if he makes the deposits at the beginning of each month, assuming no withdrawals were made? A newly married couple rents a house for $8,500 payable at the beginning of each month. What is the cash equivalent of 4 years rent if money is worth 14% compounded monthly ANNUITIES DUE First payment occurs immediately on a day to be called the present. Formulas: 1 AMOUNT 3=R, (+-4) (1 +1) 2 PRESENT VALUE A=R. (1-2) 2 +1) 3 PERIODIC PAYMENT a R = 1-(1+) 1***") (1 +0 5 (1+1)" - 1 Examples: A life insurance policy allows the option of paying your premium yearly in advance. If the monthly premium is $15, what annual premium would be equivalent at j= 12%7 A couple wants to accumulate $10,000 by December 31, 2009. They make 10 equal annual deposits starting January 1, 2000. If interest is at j=12%, what annual deposit is needed? What equal payment at the beginning of each year for 12 years will discharge a debt of $9,000 due now, if money is worth 897 Dr. Ebrahim makes a monthly deposit of $3,500 in a time deposit which pays 12% compounded monthly. How much is in his account at the end of 5 years if he makes the deposits at the beginning of each month, assuming no withdrawals were made? A newly married couple rents a house for $8,500 payable at the beginning of each month. What is the cash equivalent of 4 years rent if money is worth 14% compounded monthly