27. Problem 5.15 (Present Value of an Annuity) eBook Find the present values of

Question

27. Problem 5.15 (Present Value of an Annuity) eBook Find the present values of these ordinary annuities. Discounting occurs once a year Do not round intermediate calculations. Round your answers to the nearest cent a. $600 per year for 16 years at 10%. b. $300 per year for 8 years at 5%. c. $400 per year for 6 y+s at 0%. d. Rework previous parts assuming they are annuities due. [ Present value of $600 per year for 16 years at 10%: $ Present value of $300 per year for 8 years at 5% Present value of $400 per year for 6 years at 0%: $

Explanation / Answer

a.

present value

=600*((1-(1+10%)^(-16))/10%)

=4694.23

b.

present value

=300*((1-(1+5%)^(-8))/5%)

=1938.96

c.

present value

=400*6

=2400

d.

present value

=(600*((1-(1+10%)^(-16))/10%))*(1+10%)

=5163.65

present value

=(300*((1-(1+5%)^(-8))/5%))*(1+5%)

=2035.91

present value

=6*400

=2400

the above is answer..

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