Question
In the problems 1 to 3, find the present value of the given (ordinary) annuity.
1. $3500000 every 6 months for 5 years at the rate of 16% compounded semi-annually.
2. $7000000 per month for 10 months at the rate of18% compounded monthly.
3. $1700000 per year for 5 years at the rate of 14% compounded annually.
1. $3500000 every 6 months for 5 years at the rate of 16% compounded semi-annually.
2. $7000000 per month for 10 months at the rate of18% compounded monthly.
3. $1700000 per year for 5 years at the rate of 14% compounded annually.
Answers
I will do the first one, the other two are done the same way
a)
PV = 3500000( 1 - 1.08^-10)/.08
= $23 485 284.09
BTW, what's with the huge numbers?
a)
PV = 3500000( 1 - 1.08^-10)/.08
= $23 485 284.09
BTW, what's with the huge numbers?
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