A 30 yuear annuity is arrnaged to pay off a loan taken out today at a 5% annual effective interest rate. The first payment of the annuity is due in 10 years with teh amount of $1000. The subsequent papyments will increase $500 from the last payment. What is the loan amount?
I have this:
Loan amount = 100 a (angle 30 at 5%)v^9 + 500(a (angle 30 at 5%-30v^30)/.05) v^9
But this doesn't seem right. What am I doing wrong?
Please don't use any "cash flow" charts, I'd like to use the formulas.