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What is the present value of a 11-year annuity of $5,000 per period in which payments...

What is the present value of a 11-year annuity of $5,000 per period in which payments come at the beginning of each period? The interest rate is 14 percent. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. When using Appendix D to find the present value of this annuity due, subtract 1 from n and add 1 to the table value. (Do not round intermediate calculations. Round your final answer to 2 decimal places. )

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Answer #1

The present value of an annuity due is calculated using the Excel formula PV as follows:

=PV(rate,periods,pmt,,1)

=PV(14%,11,-5000,,1)

=$31,080.58

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