ce Problems for Exam 26 Help Save&Exit; Sut Check my wo Exercise 6-8 Present val

Question

ce Problems for Exam 26 Help Save&Exit; Sut Check my wo Exercise 6-8 Present value; annuities [LO6-7) Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2018, of a five-period annual annuity of $5,300 under each of the following situations: (FV of $1. PV of S1. EVA of S1. PVA of S1. EVAD of $1 and PVAD of $) (Use appropriate factor(s) from the tables provided.) 756 1.The first payment is received on December 31, 2019, and interest is compounded annually 2.The first payment is received on December 31, 2018, and interest is compounded annually 3.The first payment is received on December 31, 2019, and interest is compounded quarterly Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 The first payment is received on December 31, 2019, and interest is compounded annually, (Round your final answers to nearest whole dollar amount.) Table or caloulator function: Payment PV- 12/31/2018 Required 2>

Explanation / Answer

Required 1 table or calculator function PVA of $1 payment 5300 n= 5 i= 12% PV-12/31/2018 19105 calculation : 5300*3.60478 19105 (from PVA of $1 table) required 2 PVAD = 5300*4.03735 = 21398 (from PVAD table) required 3 payment PV of $ 1 PV n i= 3 % since componded quarterly first payment 5300 0.88849 4709 4 second payment 5300 0.78941 4184 8 third payment 5300 0.70138 3717 12 fourth payment 5300 0.62317 3303 16 fifth payment 5300 0.55368 2935 20 total 18848

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