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This problem demonstrates the dependence of an annuity's present value on the size of the periodic payment. Calculate the present value of 25 end-of-year payments of: (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. $1,200 b. $2,200 c. $3,200 Use a discount rate of 5.2% compounded annually. After completing the calculations, note that the present value is proportional to the size of the periodic payment.

This problem demonstrates the dependence of an annuity's present value on the size of the periodic payment. Calculate the present value of 25 end-of-year payments of: (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. $1,200 b. $2,200 c. $3,200 Use a discount rate of 5.2% compounded annually. After completing the calculations, note that the present value is proportional to the size of the periodic payment.

Essentials Of Investments
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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This problem demonstrates the dependence of an annuity's present value on the size of the periodic payment. Calculate the present value of 25 end-of-year payments of: (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. $1,200 b. $2,200 c. $3,200 Use a discount rate of 5.2% compounded annually. After completing the calculations, note that the present value is proportional to the size of the periodic payment.
Transcribed Image Text:This problem demonstrates the dependence of an annuity's present value on the size of the periodic payment. Calculate the present value of 25 end-of-year payments of: (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. $1,200 b. $2,200 c. $3,200 Use a discount rate of 5.2% compounded annually. After completing the calculations, note that the present value is proportional to the size of the periodic payment.
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