PVoa = PMT[(1 - (1 / (1 + r)^)) / r]
= 2,000[(1 - (1 / 1.12^10)) / 0.12]
= 2,000[(1 - 0.32197) / 0.12]
= 2,000[0.67803 / 0.12]
= 2,000[5.65022]
= $11,300.44606, round to $11,300.45
If payments are made at the beginning of the year, use PV annuity due "PVad"...
PVad = PVoa(1 + r)
= 11,300.44606(1.12)
= $12,656.49959, round to $12,656.50
2000*.12=240
2000+240= 2240*.12= 268.8
this is to much work do your own homework
Mr. Hobbit deposits $2,000 at the end of each year for the next 10 years at an interest rate of 12% per year. How much will he have accumulated at the end of 10 years? How much would he have accumulated if he deposited the amounts at the beginning of each year?
