Answer:
The annuity due is $527.54.
Step-by-step explanation:
Given : Payment $4500 anually 10 years at 3% interest.
To find : Annuity due ?
Solution :
The formula of annuity is
[tex]A=\frac{r\times P}{1-(1+r)^{-n}}[/tex]
Where, A is the Annuity due
P is the Payment P=$4500
r is the interest rate r=3%=0.03
n is the time n=10 years
Substitute the value in the formula,
[tex]A=\frac{0.03\times 4500}{1-(1+0.03)^{-10}}[/tex]
[tex]A=\frac{135}{1-(1.03)^{-10}}[/tex]
[tex]A=\frac{135}{1-0.74409}[/tex]
[tex]A=\frac{135}{0.2559}[/tex]
[tex]A=527.54[/tex]
Therefore, The annuity due is $527.54.
