Suppose you are going to receive a 10-year annuity with annual payments of $1,000. The first payment
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Suppose you are going to receive a 10-year annuity with annual payments of $1,000. The first payment will be received at the end of Year 1 and the last payment will be received at the end of Year 10. You will invest each payment in an account that pays 9 percent compounded annually. Although annuity payments stop at the end of year 10, you won't withdraw money from the account for another 25 years, and the account will continue to earn 9% for the entire 25-year period.
What will be the value in your account at the end of year 25 (rounded to the nearest dollar)?
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
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