Question

Chapter 5 Homework Saved Help Save & Exit Submit 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. (=interest rate, and n=number of years) (EV of $1. PV of $1. EVA of $1. PVA $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 Annuity Amount 2,000 150,000 200,000 69.620 245.000

Answer 1

	P.V	Annuity Amount	Rate	Years
1	7986	2000	8%	5
2	585296	150000	1%	4
3	351822	200000	9%	2
4	510000	69620	2%	8
5	245000	77287	10%	4
a)	PV of annuity @ 8% for 5 years		=	3.993*2000
					7986
b)	Rate	=	585296/150000
			3.901973
	At 4 years if we see the table, rate would be 1% ( Please refer annuity table)
c)	No of years	=	351822/200000
			1.75911
	At 9% rate, this value will come up at 2 years ( please refer annuity table)
d)	Rate	=	510000/69620
			7.325481
	At 8 years, will value will come at 2% ( please refer annuity table)
e)	PV figure @10% for 4 years	3.17
	Present value	=	245000
	Annuity amount	=	245000/3.17
			77287.07