What is the present value of an annuity if the size of each payment is ₱30,000 payable atthe end of each quarter for 10 years at an interest rate of 7% compounded quarterly?

Respuesta :

The present value of an annuity A with with size P payable at the end of each quarter for n trimesters at an interest rate r is given by:

[tex]A=P\frac{\lbrack(1+r)^n-1\rbrack}{r}[/tex]

For P = ₱30000, n = 4*10 = 40 and r = 0.07, we have:

[tex]\begin{gathered} A=30000\frac{\lbrack1.07^{40}-1\rbrack}{0.07} \\ A=\text{ }₱5989053.36 \end{gathered}[/tex]