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If Otto Mann agrees to pay $40,000 for an annuity that provides $605 at the beginning of each month for the next 10 years, given
If Otto Mann agrees to pay $40,000 for an annuity that provides $605 at the beginning of each month for the next 10 years, given an annual interest rate of 6.9%, would you say that he made a good investment or not? (Hint: You need to calculate the present value of the annuity and compare it to the price that he agreed to pay)
I need to enter the information w/ formulas into a spreadsheet like this one:
Relevant Information | |||||
Annual Interest Rate | |||||
Periods Per Year | |||||
Number of Years | |||||
Needed Information | |||||
Present Value | PV | ||||
Future Value | FV | ||||
Payment | PMT | ||||
Rate | RATE | ||||
Number of Periods | NPER | ||||
Additional Calculations (if needed) | |||||
Answer: | |||||
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