Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $6,500 under each of the following situations: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. The payments are received at the end of each of the five years and interest is compounded annually. 2. The payments are received at the beginning of each of the five years and interest is compounded annually. 3. The payments are received at the end of each of the five years and interest is compounded quarterly.
Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $6,500 under each of the following situations: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. The payments are received at the end of each of the five years and interest is compounded annually. 2. The payments are received at the beginning of each of the five years and interest is compounded annually. 3. The payments are received at the end of each of the five years and interest is compounded quarterly.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Assuming a 12% annual interest rate, determine the present value of a five-period
annual annuity of $6,500 under each of the following situations:
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1,
PVA of $1, FVAD of $1 and PVAD of $1)
1. The payments are received at the end of each of the five years and interest
is compounded annually.
2. The payments are received at the beginning of each of the five years and
interest is compounded annually.
3. The payments are received at the end of each of the five years and interest
is compounded quarterly.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Deposit Date
The payments are received at the end of each of the five years and interest is compour
Note: Round your final answers to nearest whole dollar amount.
First payment
Second payment
Third payment
Fourth payment
Fifth payment
j=
3%
3%
3%
3%
3%
Required 3
X Answer is complete but not entirely corre
n=
4 ✓ $
8
12
16 ✓
20
Deposit
6,500
6,500
6,500
6,500
6,500
$
$
< Required 2
PV
19,760 X
100 X
100 X
100 x
100 X
20,160
Required 3
>
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