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  #1  
Old 01-30-2017, 12:23 AM
mistersunnyd mistersunnyd is offline
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Default Trouble with annuity time lines

A 30-year annuity is arranged to pay off a loan taken out today at a 5% annual effective interest rate. The first payment of the annuity is due in ten years in the amount of 1,000. The subsequent payments increase by 500 each year.
Calculate the amount of the loan.

I tried doing this problem like this: (v^10)*(1000 a double dot angle 30 at 5% + 500 Ia angle 29 at 5%), but something's wrong. Could anyone please explain? Thank you.
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Old 01-30-2017, 12:30 AM
Academic Actuary Academic Actuary is offline
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The setup looks OK what is your answer and what is the given answer.
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Old 01-30-2017, 12:40 AM
mistersunnyd mistersunnyd is offline
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Ah my bad. I messed up the formula for increasing annuities...
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Old 01-30-2017, 01:04 AM
Academic Actuary Academic Actuary is offline
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Try this

1000 + 500/.05 PMT
- 30 x 500/.05 FV
30 N
5 I/Y
CPT PV FV
0 PMT
9 N
CPT PV
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Old 04-20-2018, 01:38 AM
pxp91 pxp91 is offline
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Thanks for the reply. This might sound like a dumb question but I didn't quite get the keystrokes, could you please explain a bit?

Thanks a lot.
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