Question

For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i= interest rate, and n= number of years) (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Present Value eBook References 585 296 351,822 510.000 245.000 Annuity Amount 2.000 150,000 200,000 69 6201

Answer 1

	Present value=Annuity amount*Discount factor at i% for n years
1	Present value=2000*Discount factor at 8% for 5 years=2000*3.99271=$ 7985
2	585296=150000*Discount factor at i% for 4 years
	Discount factor at i% for 4 years=585296/150000
	Discount factor at i% for 4 years=3.901973
	Check Present value annuity table in period 4 row for 3.901973
	i=1%
3	351822=200000*Discount factor at 9% for n years
	Discount factor at 9% for n years=351822/200000
	Discount factor at 9% for n years=1.75911
	Check Present value annuity table in 9% column for 1.75911
	n=2
4	510000=69620*Discount factor at i% for 8 years
	Discount factor at i% for 8 years=510000/69620
	Discount factor at i% for 8 years=7.325481
	Check Present value annuity table in period 8 row for 7.325481
	i=2%
5	245000=Annuity amount*Discount factor at 10% for 4 years
	245000=Annuity amount*3.169865
	Annuity amount=245000/3.69865=$ 77290
		Present value	Annuity amount	i=	n=
	1	7985	2000	8%	5
	2	585296	150000	1%	4
	3	351822	200000	9%	2
	4	510000	69620	2%	8
	5	245000	77290	10%	4