Question

15. Problem 5.15 (Present Value of an Annuity) eBook Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. a. $1,000 per year for 12 years at 10%. b. $500 per year for 6 years at 5%. c. $800 per year for 6 years at 0%. d. Rework previous parts assuming they are annuities due. Present value of $1,000 per year for 12 years at 10%:$ Present value of $500 per year for 6 years at 5%: $ Present value of $800 per year for 6 years at 0%: $

Answer 1

Calculate the present value of annuity and annuity due as follows:

| A B 429 a Present value 430 b Present value 431 c Present value 432 d Present value 433 Present value 434 Present value $6,813.69 $2,537.85 $4,800.00 $7,495.06 $2,664.74 $4,800.00

Formulas:

A 429 a 430 b 431 c 432 d 433 434 B Present value Present value Present value Present value annuity due Present value annuity due Present value annuity due =PV(10%,12,-1000) =PV(5%,6,-500) =PV(0%,6,-800) =PV(10%,12,-1000,,1) =PV(5%,6,-500,,1) =PV(0%,6,-800,,1)