# Calculate the present value of each of the following cash flows at 8% using interest tables, a financial calculator, or

## Question:

a. $ 15,000 is to be received at the end of each of the next six semiannual interest periods, plus $ 20,000 to be received at the end of each of the next four semiannual interest periods after that. Interest is compounded semiannually.

b. There are no cash flows to be received at the end of the first eight semiannual periods. However, $ 24,000 is to be received at the end of the next six semiannual periods after that (this is known as a deferred annuity with semiannual compounding). Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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**Related Book For**

## Intermediate Accounting

**ISBN:** 978-0132162302

1st edition

**Authors:** Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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