Problem 7-20 You are offered an annuity that will pay $12,000 a year for nine years (that is, nine payments), but the payments start after five years have elapsed. If you want to earn 8 percent on your funds, what is the maximum you should pay for this annuity? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. Interest Factors for the Present Value of One Dollar 1 9 800" TAK09:00 0% 0. 691/940903 TBN BEp2847833 2013 14083 8, 804318- 01 100% 0.80 SENT E RMAN I A9 %A1 , A3 B BE 6369925553 516482473 5 5) TAINE 86382284 M713681650621 567 59 497 | 46 437402 341 28 215 b. AMD 6606 1008 B130711 E65 623 53 547513452 400 36 80. 1379 582 540 502 467 327 991830603 59244 SOO 40 424 . .. .6661_558 0 6: 1862 247 || 806804 (2) 650 527 45 470388 | 350 287 237 g8888 D108557 497444 397 356 319 57 208 .187 03E | 469 45 368 326 290 29 182 1.163 10 .80 58 (6) 5/ 505442388 340 29 263 2005 1650 | 141 15 861 M3 642 555 481 417 32 315 25 239 183 140 123 16853 728 623 534 458 39 339 292 252 | 218 163 123 1 844 14 DC5 1.513 | 198 146 .108 18830 DO 4 1982868650 20 .820 673 554 456 37 312 104 073 25 780 610 478 375 295 233 184 146 | 059 038 030 024 30 702 552 412 308 231 14 131 099 105 057 | 033 020 1 2015 2012 W www SW www 016 010 005 007 004 002 001 Interest Factors for the Present Value of an Annuity of One Dollar 10000990000 902 0900 940025 0.026 0917 0009 0 8970 877 0.85208470833 0.06 0.781 0.750 0.735 9700 5 6 SOTRE BORR3 1.750 1.736 1690 1647 1.605 1.566 1.528 1.457 1.292 1.232 1.276 1 2941 288 289 2.775 2123 2673 2624 2577 25312487 2.40222222 246 2.1742 106 1.981 1.868 1.766 1674 9 022 808 3.717 3630 546 3.465 3.387 312 3.240 2.170 3037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 5 485347174580 4.452 4.329 4.212 4.100 2.993 3890 3.791 3.605 3.433 3.274 3.127 2991 2.745 2.532 2.345 2.181 2.759 2.534 2.399 6 795 5.601 5417 5.705.076 4.917 4.766 4623 4.486 4.355 4.111 33.89 3.685 3.498 3.326 3.020 7 6 .472 62206005786 552 5 395 206 504 4564424039 3.812 3 605 3.242 2.937 2678 2.455 8 76927325 7070 67336.463 6210 5.9715 747 5575 5235 496 46394344 4.078 3837 3.4213.076 2.786 2.540 9 566 81627867435 Z108 6 802 6 515 6 247 5 985 559 53284946 4.607 4 303 4031 3.566 3.184 2.868 2603 10 2.650 0.4718.9838.530 8 1117.722 7.360 7024 6.710 6.418 6145 5.650 5.216 4833 4.494 4.193 3682 3.269 2.930 1 10 7 87 0252 8760 3.206 78877499 2110 6 ROS 6.495 5.988 5.457 5.029 4656 4.327 3.776 3.335 29782683 12 11 255 10.575 9.954 9.385 8.863 8.384 794) 7.536 7.161 6,814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12 11 11 348 10615 9.9869.294853483587904 7487 71016.424 58425.242 4910 4.533 3.912 3.427 3040 2.727 1417004 12 106 11 296 10 563 9899 9.295 8.245R244 7786 7267 662 6.002 5.468 5008 4.611 3.952 3.459 3 061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8,060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 0.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.502 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8,544 8.002 7.120 6.373 5.749 5.222 4.775 4,059 3.518 3.097 2.763 18 16 298 14.992 13.754 12.659 11 690 10 R28 10 059 9 372 8.756 8.2017.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 1917.226 15.678 14 324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.0973.539 3.109 2.770 0 16 16.51 M Z 12.590 12.462 11470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 1.546 2111 2.772 25 22023 19.523 17413 15.622 14.094 12.783 11654 10.675 9.8239.077 7.843 6.873 6.097 5.467 4948 4.147 3.564 3.122 2.776 30 25 808 22.937 19.600 17.292 15 373 13765 12.409 11258 10.774 9 427 8.055 7003 6.177 5.517 4979 4.160 3.569 3.124 2.778 2
