Future and present value of an annuity Use equations 5.3 and 5.4 to find the future and present value of a five-year ordinary annuity paying $100 per year at each of the following interest rates:

a. 20%

b. 10%

c. 1%

d. 0.1%

e. What is the general principle that you see when you compare your answers here?

What value are both the present value and future value getting close to as you move from part a to part d?

Equations

Transcribed Image Text:

- 1] (1 FV = CF x {[( + r) * - (5.3)