Question

Question 21 (2.5 points) Saved "A uniform series of payments begins in year 6 and ends in year 9. If you use the P/A factor with n=4, the P value you get will be located in year:

For Q.22.. a) 0.3126 b) 2.7432 c) 3.1993 d) p/a factor cannot be determined

Answer 1

21.

(P/A,i,n)

Uniform series present worth factor

*Takes uniform series

*Moves to single payment one period earlier than the first Payment of the series.

1st payment = Year 6

One period earlier = 5

So the P value we get will be located in year 5.

22.(P/A,17%,5)

=[(1+i)^n]-1/i(1+i)^n

=[(1+0.17)^5 - 1]/(1.17)^5

=1.1924480/0.3727161606

=3.199346

P/A for n = 5 is 3.19934