Real basic Pension TVM Question

CFA Level II
#1

Just catching up on my videos, if oyu have a retirement annuity of 3,000$ paid out for 15 years with a discount rate of 10% how do you get the PV at retirement to equal $22,818 like it says in the example. I’m just blanking on this one.

#2

just put it all into your calculator

N = 15, I/Y = 10, PMT = 3000, FV = 0 then solve for PV.

#3

Thanks I swear I’ve forgotten how to use my ba ii plus

#4

PV of an annuity paying 1 per year is (1 - v^n) / i, where v = 1 / (1 + i).

i = 10%

(1 - (1 / 1.1)^15) / .1 = 7.60608

3000 * 7.60608 = $22,818.24