Present Value of a General Annuity - Combination Problem #1
This video shows an application problem in which we need to compute the present value of a general annuity with a deferment period (the first payment of the annuity takes place after a period in which only the initial deposit is earning interest). the problem is the following:
Mr. Richards intends to retire in eight years. To supplement his pension he would like to receive $950 every three months for fifteen years. If he is to receive the first payment three months after his retirement and interest is 5.75% p.a. compounded annually, how much must he invest today to achieve his goal?