6. 0/1 points | Previous Answers TanApCalcB-967.020 My Estimate the present valu

Question

6. 0/1 points | Previous Answers TanApCalcB-967.020 My Estimate the present value of an annuity if payments are $780 monthly for 12 years and the account earns interest at the rate of 10%yr compounded continuously. (Round your answer to two decimal places.) 234.93X Need Help? eaITalk to a Tter -1 points TanApCalcBo 6.7 024 My Leah wishes to supplement her retirement income by $200/month for the next 15 years by obtaining a reverse annuity mortgage (RAM). Estimate the amount of the mortgage she will require if the prevailing interest rate is 9% year compounded continuously. (Round your answer to two decimal places.) Need Help?hTak Tutor

Explanation / Answer

6. The net present value of an annuity can be given by

P = (monthly payments * 12 * t) / (1 + r/100)^t

P = (780 * 12 * 12) / (1+0.1)^12

P = $ 112320 / 3.138428

P = $ 35788.61

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