Question: The annually compounded discount rate is 7.5%. You are asked to calculate the present value of a 15-year annuity with payments of $50,600 per year.

The annually compounded discount rate is 7.5%. You are asked to calculate the present value of a 15-year annuity with payments of $50,600 per year.

a. Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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.). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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