ESTION IS: The present value at j12 of a $10,000 payment today, followed by 32 monthly payments of $5000 is $136,335.69. What is the present value of 33 monthly payments of $2000, first payment made today, if these payments earn the same interest rate, j12? Answer is $52,534.28 I need all of the following: N – time in years (for compound interest calculations) OR # of payments made during the term of the annuity (for annuity calculations) I/Y – nominal annual rate of interest per year (entered as a %; NOT a decimal) C/Y – # of interest compounding periods per year P/Y – # of payment periods per year PV – present value (the amount of money at the beginning of the transaction.) PMT – payment amount FV – future value (money at the end of the transaction.)
QUESTION IS:
The
Answer is $52,534.28
I need all of the following:
N – time in years (for
term of the
I/Y – nominal annual rate of interest per year (entered as a %; NOT a decimal)
C/Y – # of interest compounding periods per year
P/Y – # of payment periods per year
PV – present value (the amount of money at the beginning of the transaction.)
PMT – payment amount
FV –
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3. The present value at j12 of a $10,000 payment today, followed by 32 monthly payments of
$5000 is $136,335.69. What is the present value of 33 monthly payments of $2000, first payment
made today, if these payments earn the same interest rate, j12?
You are given: 136,335.69 = 10,000+ future value of an ordinary annuity of 5000 with 32
payments. Here r is not known. So, find a32]r from the above formula. Now, do the second part.
Find the present value of an annuity due of a payment of 2000 for 33 monthly payments.
Substitute that a32]r value here.
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