What is the present value of a $5,000 annual annuity due with payments over 10 years if interest rates are 6.0%?
annuity due means the payments are at beginning of the year
the present value is
=(PMT*((1-(1+r)^(-n))/r))*(1+r)
=(5000*((1-(1+6.0%)^(-10))/6.0%))*(1+6.0%)
=39008.46
the above is answer..
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