Question
Dayton Company is considering investing in an annuity contract that will return $28,200 annually at the end of each year for 14 years.
What amount should Dayton Company pay for this investment if it earns a 6% return?
Account.pdf - Adobe Reader File Edit View Window Help 14 198% Tools Sign Comment Sign In Export PDF Files TABLE 1 Future Value of 1 Adobe ExportPDF Convert PDF files to to Word or Excel online. Select PDF File: Periods 5% 15% 4% 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.04000 1.05000 1.06000 1.07000 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000 1.08160 1.10250 1.12360 1.14490 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 1.16986 1.21551 1.262481.31080 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901 1.21665 1.27628 1.33823 1.40255 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 1.26532 1.34010 1.41852 1.50073 1.58687 1.67710 1.77156 1.870411.97382 2.31306 1.31593 1.40710 1.50363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 2.66002 1.36857 1.477461.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 3.05902 1.42331 1.55133 1.689481.83846 1.99900 2.171892.35795 2.55803 2.77308 3.51788 1.48024 1.62889 1.79085 1.96715 2.15892 2.36736 2.59374 2.839423.10585 4.04556 1.53945 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 .65239 1.60103 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 3.49845 3.89598 5.35025 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.883284.363496.15279 1.731681.97993 2.26090 2.57853 2.93719 3.34173 3.79750 4.310444.88711 7.07571 1.80094 2.078932.39656 2.75903 3.17217 3.642484.17725 4.784595.473578.13706 1.87298 2.18287 2.54035 2.95216 3.42594 3.97031 4.59497 5.310896.130399.35762 1.94790 2.29202 2.692773.15882 3.70002 4.32763 5.054475.895096.86604 10.76126 2.02582 2.40662 2.85434 3.37993 3.99602 4.717125.55992 6.54355 7.68997 12.37545 2.10685 2.52695 3.02560 3.61653 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 2.19112 2.65330 3.20714 3.86968 4.66096 5.60441 6.72750 8.06231 9.64629 16.36654 6% 9% 10% 12% Account.pdf 8% 11% 1 file/261 KB 0 Convert To: Microsoft Word (.docx) Recognize Text in English(U.S.) Change 4 onvert Create PDF Files Send Files 9 20 2:14 PM 4/10/2016
Explanation / Answer
From the above Table No. 2; Future value of Annuity of 1, 6% and 14 Years = 21.01507
The Instalment amount = $ 28,200
Therefore, amount should Dayton Company pay for this investment if it earns a 6% return = 28,200 * 21.01507
= $ 592,624.97
The Answer is $ 592,624.97
