Present Value of an Annuity Find the present value of the following ordinary ann

Question

Present Value of an Annuity

Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.)

$600 per year for 10 years at 14%.
$   

$300 per year for 5 years at 7%.
$   

$600 per year for 5 years at 0%.
$  

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

$600 per year for 10 years at 14%.
$   

$300 per year for 5 years at 7%.
$   

$600 per year for 5 years at 0%.

Explanation / Answer

Ordinary annuities =

$600 per year for 10 years at 14%. = $3,129.67

$300 per year for 5 years at 7%. = $1,230.06

$600 per year for 5 years at 0%. = $3,000

Annuities due =

$600 per year for 10 years at 14%. = $3,567.82

$300 per year for 5 years at 7%. = $1,316.16

$600 per year for 5 years at 0%. = $3,000

I hope my solution solves your query.

Regards.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.