4. What is the present value of the following annuity? $1,022 every half year at

Question

4. What is the present value of the following annuity?
$1,022 every half year at the end of the period for the next 8 years, discounted back to the present at 19.17 percent, compounded semiannually.
Round the answer to two decimal places.

5. You have decided to place $567 in equal deposits every month at the beginning of the month into a savings account earning 14.68 percent per year, compounded monthly for the next 11 years. The first deposit is made today. How much money will be in the account at the end of that time period?
Round the answer to two decimal places.

6. What is the present value of the following annuity?
$3,216 every half year at the beginning of the period for the next 6 years, discounted back to the present at 3.84 perecent per year, compounded semiannually.
Round the answer to two decimal places.

Explanation / Answer

Excel formulae used

fv(rate percent, number of time periods, installment amount,, 1-begining of time period/ 0 - end of time period)

pv(rate percent,number of time periods, installment amount,, 1-begining of time period/ 0 - end of time period)

Ans4 =>$8197.36 = PV(9.585,16,-1022,,0) rate percent = 19.17/2 = 9.585%, time periods = 8*2 = 16

Ans5 =>$185730.11= FV(1.22,132,-567,,1) rate percent = 14.68/12 = 1.22%, time periods = 11*12 = 132

Ans6 =>$34834.21= PV(,12,-3216,,1) rate percent = 3.84/2 = 1.92%, time periods = 6*2 = 12

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