Homework Answers
17)
Presnet value = Annuity * [1 - 1 / (1 + r)^n] / r
Presnet value = 50,000 * [1 - 1 / (1 + 0.05)^15] / 0.05
Presnet value = 50,000 * [1 - 0.481017] / 0.05
Presnet value = 50,000 * 10.379658
Presnet value = $518,982.90
18)
Rate = 6% / 2 = 3%
Number of periods = 5 * 2 = 10
Future value = Presnet value (1 + r)^n
Future value = 8000 (1 + 0.03)^10
Future value = 8000 * 1.343916
Future value = $10,751.33
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PLEASE help with question 17 and 18...
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