You are considering an annuity which costs $127,392 today. The annuity pays $7,7

Question

You are considering an annuity which costs $127,392 today. The annuity pays $7,700 a year at an annual interest rate of 4.5 percent. What is the length of the annuity time period? 29.90 years 32.00 years 36.35 years 25.55 years 31.00 years How do i do this? I keep entering it into my calculator and don't think it's getting me the correct answer

Explanation / Answer

=> PV = $127,392 r =4.5% , CF = $7700 => 127932 = 7700/(1.045) + 7700/(1.045)^2+-------+7700/(1.045)^n solving for n we get n=31 yrs in financial calculator you enter PV = -127,932(note: negative sign) I/Y = 4.5 , FV =0 , PMT =7700 ,CPT->N you get N=31

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