Find the payment made by the ordinary annuity with the given present value.
-$\$ 390,000$ quarterly payments for 18 years; interest rate is $4.9 \%$ compounded quarterly.
A) $\$ 18,586,976.07$
B) $\$ 55,902,289.81$
C) $\$ 45,086,493.32$
D) $\$ 6,265,695.35$

Question

Quizplus · Accepted Answer

The present value of an ordinary annuity formula is used: $ PV = P \times \frac{1 - (1 + r)^{-nt}}{r} $. Solving for $ P $ with $ PV = 390,000 $, $ r = 0.049/4 $, $ n = 4 \times 18 $, we find $ P \approx 18,586,976.07 $.

Find the Payment Made by the Ordinary Annuity with the Given