Your annuity grows at 8% per quarter. The first cash payment is $200. What is the PV of this growing annuity if the payments are made for 12 quarters and the interest rate is 16%?
PVOrdinary Annuity = C/((r-g)/(f*100))*(1-((1+g/(f*100))/(1+r/(f*100)))^(n*f)) |
C = First cash flow |
i = interest rate g = growth rate |
n = number of payments I f = frequency of payment |
PV= 200/((16-32)/(4*100))*(1-((1+32/(4*100))/(1+16/(4*100)))^(3)) |
PV = 2864.21 |
Your annuity grows at 8% per quarter. The first cash payment is $200. What is the...
The PV of a 8 annual-payment growing annuity is $89,719.63. The first payment of the growing annuity is $12,000 due one year from now. Subsequent annual payments are expected to grow at an annual rate identical to the effective annual interest rate. What is the annual growth rate?
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