Homework Answers
b. The present value of investment is $58963.84 ,
Present value of ordinary annuity = payment / interest* [1 - 1/(1+interest)number of periods]
=$10000/0.005 * [1 - 1/(1+0.005)6]
=$10000/0.005 * [1 - 1/(1.005)6]
=$10000/0.005 * [1 - 1/1.030378]
=$10000/0.005 * 0.029482
=$58964 (rounded off)
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