This is my last question Suppose you are going to receive $14,500 per year for s

Question

This is my last question

Suppose you are going to receive $14,500 per year for six years. The appropriate interest rate is 9.6 percent.

What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Suppose you plan to invest the payments for six years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Suppose you plan to invest the payments for six years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Suppose you are going to receive $14,500 per year for six years. The appropriate interest rate is 9.6 percent.

Explanation / Answer

Forula is P = PMT [(1 - (1 / (1 + r)n)) / r]

1. Present value-annuity ordinary=

$ 63,088.65

2. Present value- annuity due

3. Future value annuity ordinary=

4. Future value annuity due=

$ 63,088.65

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