### Calculate the Annuity Value, Knowing the Present Value.

**SOLUTION**The annual loan payment is $1252.

In Example 4-3, with interest at 8%, a present sum of $5000 is equivalent to five equal end-of-period disbursements of $1252. This is anotherway of stating Plan 3 of Table 3-1.

The method for determining the annual payment that would repay $5000 in 5 years with 8% interest has now been explained. The calculation is simply

If the capital recovery formula (Equation 4-7) is solved for the present sum P, we obtain the uniform seriespresent worth formula

which is the uniform series present worth factor.

## 2 comments:

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