Question: Please help with #2 and #3 for present value, future value and annuity due subjects: 1. Find the PV of an ordinary annuity that pays
Please help with #2 and #3 for present value, future value and annuity due subjects:
| 1. Find the PV of an ordinary annuity that pays $1,000 at the end of each of the next 5 years if the interest rate is 15%. | ||||||
| Inputs: | PMT = | $1,000.00 | ||||
| FV = | ||||||
| N = | 5.00 | |||||
| I/YR = | 15% | |||||
| PV: Use function wizard (PV) | PV = | 3352.16 | ||||
| 2. How would the PV and FV of the above annuity change if it were an annuity due rather than an ordinary annuity? | ||||||
| Inputs: | PMT = | |||||
| FV = | ||||||
| N = | ||||||
| I/YR = | ||||||
| PV: Use function wizard (PV) | PV = | |||||
| 3. Find the PV of an investment that makes the following end-of-year payments. The interest rate is 8%. | ||||||
| Year | Payment | |||||
| 1 | 100 | |||||
| 2 | 200 | |||||
| 3 | 400 | |||||
| Rate = | 8% | |||||
| To find the PV, use the NPV function: | PV = |
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