If you put up $39,000 today in exchange for a 6.5 percent, 16-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

$3,992.73

Explanation:

For computing the annual cash flow we need to apply the PMT formula i.e to be shown in the attachment below:

Given that,  

Present value = $39,000

Future value or Face value = $0

RATE = 6.5%

NPER = 16 years

The formula is shown below:  

= PMT(RATE;NPER;-PV;FV;type)  

The present value come in negative  

So, after applying the above formula, the annual cash flow is $3,992.73

answer; ///(c) i believe its it ignores cash flows following the payback period;

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