For each of the following annuities, calculate the annual cash flow.
Solution
Present Values are calculated using the argument PV (Cash Flow, interest rate, no. of years)
Given a present value, the cash flow can be worked out with the reverse technique using the Trial
and Error method Cash Flow Present Interest Years Value Rate %
$ 6530 32100 6 6 $ 4337 29200 4 8 $ 18142 155000 9 17
$ 21399 225300 8 24.
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For each of the following annuities, calculate the annual cash flow..pdf
1. For each of the following annuities, calculate the annual cash flow. (Enter rounded answers as
directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2
decimal places (e.g., 32.16).)
Solution
Present value of annuity = P×[1-(1÷(1+r)^n)]÷r
r is interest rate per period
P is payment per period
n is number of payments
$33,100 = P×[1-(1÷(1+10%)^6)]÷10%
Annual cash flows, P = $7,600
$30,700 = P×[1-(1÷(1+8%)^8)]÷8%
Annual cash flows, P = $5,342.25
$170,000 = P×[1-(1÷(1+13%)^17)]÷13%
Annual cash flows, P = $25,263.43
$243,300 = P×[1-(1÷(1+12%)^24)]÷12%
Annual cash flows, P = $31,255.16
![For each of the following annuities, calculate the annual cash flow. (Enter rounded answers as
directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2
decimal places (e.g., 32.16).)
Solution
Present value of annuity = P×[1-(1÷(1+r)^n)]÷r
r is interest rate per period
P is payment per period
n is number of payments
$33,100 = P×[1-(1÷(1+10%)^6)]÷10%
Annual cash flows, P = $7,600
$30,700 = P×[1-(1÷(1+8%)^8)]÷8%
Annual cash flows, P = $5,342.25
$170,000 = P×[1-(1÷(1+13%)^17)]÷13%
Annual cash flows, P = $25,263.43
$243,300 = P×[1-(1÷(1+12%)^24)]÷12%
Annual cash flows, P = $31,255.16](https://image.slidesharecdn.com/foreachofthefollowingannuitiescalculatetheannualcashflow-230325082355-28e0824f/85/for-each-of-the-following-annuities-calculate-the-annual-cash-flowpdf-1-320.jpg)
