Present Value of a Deferred Annuity

The present value of a deferred annuity is given by

where

R is the regular payment;

j is the interest rate per period;

n is the number of payments ;

k is the number of conversion periods in the deferral

Lesson 30 Supplementary Exercises

A. Find the period of deferral in each of the following deferred annuity problem.

1. Monthly payments of P1,000 for 9 years that will start 9 months from now

2. Monthly payments of P200 for 6 years that will start at the end of 10 years

3. Semi-annual payments of P12,700 for 5 years that will start 2 years from now

4. Semi-annual payments of P8,500 for 8 years that will start 12 years from now

5. Withdrawals of P7,200 every 3 months for 9 years that will start at the end of 2

years

6. Payments of P13,000 every 3 months for 18 years that will start four years from

now

7. Annual payments of P600 for 7 years that will start 7 years from now

8. An amount of P1,850 payable every year for 30 years that will start 5 years from

now

9. Payments of P17,000 every 4 years for 12 years starting at the end of 12 years

10. Payments of P20,000 every 3 years for 15 years starting at the end of 12 years