You are considering an annuity which costs $72,600 today. The annuity pays $5,10

Question

You are considering an annuity which costs $72,600 today. The annuity pays $5,100 a year. The rate of return is 4 percent. What is the length of the annuity time period?
-5.39 years -10.74 years -14.24 years -21.48 years -2.42 years You are considering an annuity which costs $72,600 today. The annuity pays $5,100 a year. The rate of return is 4 percent. What is the length of the annuity time period?
-5.39 years -10.74 years -14.24 years -21.48 years -2.42 years
-5.39 years -10.74 years -14.24 years -21.48 years -2.42 years

Explanation / Answer

5100 * [1-(1+4%)^-n]/4% = 72600

=>

n = 21.48 years

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