You want to save for a world cruise when you retire. You will need $20,000, interest rates are 6%, and you plan on retiring in 20 years. Using the Visual Basic .NET Financial.Pmt function, Financial.Pmt(Rate, NPer, PV [,FV, Due]), which is correct for annual payments due today?
A) Financial.Pmt(.06, 20, 0, 20000, DueDate.EndOfPeriod)
B) Financial.Pmt(.06, 20, 0, 20000, DueDate.BegOfPeriod)
C) Financial.Pmt(.06.12, 20*12, 0, 20000, DueDate.EndOfPeriod)
D) Financial.Pmt(.06.12, 20*12, 0, 20000, DueDate.BegOfPeriod)

Question

Quizplus · Accepted Answer

The correct choice is B) Financial.Pmt(.06, 20, 0, 20000, DueDate.BegOfPeriod) because it correctly calculates the annual payment needed to save $20,000 over 20 years at an annual interest rate of 6%, with payments made at the beginning of each period.

You Want to Save for a World Cruise When You