Simple basic Formula:
Present value= Future value/(1+r)^n
r =interest rate 5% or 0.05
n = number of periods. (n=0 to 39)
In Annuity due, we get the payment at the beginning of the year.
So n=0, we get 10 and it ends with getting 1units at n= 39.
So the present value of annuity due=
{[10/(1.05)^0]+[10/(1.05)^1]+[10/(1.05)^2]+[10/(1.05)^3]+[9/(1.05)^4]+[9/(1.05)^5]+[9/(1.05)^6]+[9/(1.05)^7]+[8/(1.05)^8]+[8/(1.05)^9]+[8/(1.05)^10]+[8/(1.05)^11]+.......................[1/(1.05)^36]+[1/(1.05)^37]+[1/(1.05)^38]+[1/(1.05)^39]}
=126.3967
So X=126.3967
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Please show the work/formulas.
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