Question

$51,270 receivable at the end of each period for 8 periods compounded at 11%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Present value

$ enter the present value in dollars rounded to 0 decimal places

$51,270 payments to be made at the end of each period for 16 periods at 9%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Present value

$enter the present value in dollars rounded to 0 decimal places

$51,270 payable at the end of the seventh, eighth, ninth, and tenth periods at 11%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Present value

Answer 1

Solution:

(1)

present value of annuity = annuity x PVAF

= $51270 x 5.14612

= $263842

where,

PVAF(11%, 8) = 5.14612

(2)

present value of annuity = annuity x PVAF

= $51270 x 8.31256

= $426185

where,

PVAF(9%, 16) = 8.31256

(3)

present value = ($51270 x PVF(11%,7) + ($51270 x PVF(11%,8) + ($51270 x PVF(11%,9) + ($51270 x PVF(11%,10)

= ($51270 x 0.48166) +  ($51270 x 0.43393) +  ($51270 x 0.39092) +  ($51270 x 0.35218)

= $85041

where,

PVF(11%,7) = 0.48166

PVF(11%,8) = 0.43393

PVF(11%,9) = 0.39092

PVF(11%,10) = 0.35218

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