Find the payment that should be used for the annuity due whose future value is given. Assume that the compoundingperiod is the same as the payment period.
-$\$ 118,000$; monthly payments for 8 years; interest rate $9 \%$.
A) $\$ 837.44$
B) $\$ 289.52$
C) $\$ 2501.27$
D) $\$ 849.80$

Question

Quizplus · Accepted Answer

The future value of an annuity due is given by the formula:FV = PMT * [(1 + r)^n - 1] / rwhere:PMT is the paymentr is the interest rate per periodn is the number of periodsIn this case, we have:FV = $118,000r = 9% / 12 = 0.75% per monthn = 8 * 12 = 96 monthsSubstituting these values into the formula, we get:$118,000 = PMT * [(1 + 0.0075)^96 - 1] / 0.0075PMT = $837.44Therefore, the payment that should be used for the annuity due is $837.44.

Find the Payment That Should Be Used for the Annuity $118,000\$ 118,000$118,000

Find the Payment That Should Be Used for the Annuity $\$ 118,000$