The annual payment on a house is $18,000. If payments are made for 40years, how much is the house worth assuming

The answer is $2,785,715.38

Explanation:

Annual payment(PMT) is $18,000. This periodic payment is called an annuity.

Number of years(N) for the payment is 40 years

Interest rate is 6%

So how much does the house worth after 40 years?

Using a Financial calculator:

N = 40; I/Y = 6; PMT = 18,000 CPT FV =2,785,715.38

After 40 years, the house will worth $2,785,715.38

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