Exercise 6-8 Present value; annuities [LO6-7]

Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2016, of a five-period annual annuity of $5,000 under each of the following situations: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. The first payment is received on December 31, 2017, and interest is compounded annually

Table or calculator function: ?

Payment : 5000

n= ?

i= 12%

PV- 12/31/2016 $ ?

2. The first payment is received on December 31, 2016 and interest iscompounded annually.

Table or calculator function: ?

Payment: $ 5000

n= ?

i= 12%

PV - 12/31/2016: $ ?

3. The first payment is received on Decmber 31, 2017, and interest is compounded quaterly.

Using the PV of $ 1 chart, calculate the present value:

Deposit Date I= n= Deposit PV-12/31/2016

12/31/2017 ? ? $5000 $?

12/31/2018 ? ? 5000 ?

12/31/2019 ? ? 5000 ?

12/31/2020 ? ? 5000 ?

12/31/2021 ? ? 5000 ?

Thanks!