2. This graph shows interest earned by an annuity that pays $17 000 at the end of each year for time periods of up to 25 years from now at 8.4% per year compounded annually. Each payment is made at the end of the compounding period.

2. This graph shows interest earned by an annuity that pays $17 000 at the end of each year for time periods of up to 25 years from now at 8.4% per year compounded annually. Each payment is made at the end of the compounding period.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

Estimate the interest earned by an annuity for each time period.

i) 2 years: _____

ii) 14 years: _____

iii) 22 years: _____

2. This graph shows interest earned by an annuity that pays $17 000 at the end of each year
for time periods of up to 25 years from now at 8.4% per year compounded annually.
Each payment is made at the end of the compounding period.
Interest Earned ($1000)
260
240
220
200
180
160
140
120
100
80
60
40
20
5
10
Years
15
20
25

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