(Present value of an annuity due) Determine the present value of an annuity due of $2,000 per year for 8 years discounted back to the present at an annual rate of 6 percent. What would be the present value of this annuity due if it were discounted at an annual rate of 11 percent? a. If the annual discount rate is 6 percent, the present value of the annuity due is $. (Round to the nearest cent.) b. If the annual discount rate is 11 percent, the present value of the annuity due is $ (Round to the nearest cent.)
(Present value of an annuity due) Determine the present value of an annuity due of $2,000 per year for 8 years discounted back to the present at an annual rate of 6 percent. What would be the present value of this annuity due if it were discounted at an annual rate of 11 percent? a. If the annual discount rate is 6 percent, the present value of the annuity due is $. (Round to the nearest cent.) b. If the annual discount rate is 11 percent, the present value of the annuity due is $ (Round to the nearest cent.)
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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Question
100%
A) suppose be $22,168.70 not sure formula is correct
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an annuity duen $2,000 per
year for 8 years discounted beck
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rate of le percent. What would
be the present value of this
annuity due if it whe discountul
at and anival rate of Il percalt?
= $2000*(1 + (6³0) P [1 + (50)=8 / X
=22116888.70
2214857645
a
b) = $2000 + (1+1135) * [1+1196²7/113
8,757 43
$
8757.42563
Transcribed Image Text:(Present value of an annuity due) Determine the present value of an annuity due of $2,000 per year for 8 years discounted back to the present at an annual rate of 6 percent. What would be the
present value of this annuity due if it were discounted at an annual rate of 11 percent?
a. If the annual discount rate is 6 percent, the present value of the annuity due is $. (Round to the nearest cent.)
b. If the annual discount rate is 11 percent, the present value of the annuity due is $. (Round to the nearest cent.)
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