The annually compounded discount rate is 13 5 You are asked to calculate the present value of a 16 year annuity with payments of $51,800 per year a Calculate the PV if the annuity payments arrive at one year intervals The first payment arrives one year from now b Calculate the PV if the first payment arrives in six months Following payments arrive at one year intervals (i e , at 18 months, 30 months, etc ) $

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Question: The annually compounded discount rate is 13.5%. You are asked to calculate the present value of a 16-year annuity with payments of $51,800 per year.

The annually compounded discount rate is 13.5%. You are asked to calculate the present value of a 16-year annuity with payments of $51,800 per year.

a.	Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now.

b.	Calculate the PV if the first payment arrives in six months. Following payments arrive at one-year intervals (i.e., at 18 months, 30 months, etc.).

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