Question
A two-year investment requires monthly deposits of $110 at the beginning of each month. The deposits...
A two-year investment requires monthly deposits of $110 at the beginning of each month. The deposits earn 6% per year. Calculate the investment’s future value.
What is the present value of an annuity of $456 to be received at the end of each year for three years discounted at 10.2% APR?
Calculate the present value of $400 to be received at the beginning of each year for four years if the discount rate is 11%. Remember, the payments will be received at the beginning of each year (annuity due).
Homework Answers
Answer #1
A two-year investment requires monthly deposits of $110 at the beginning of each month. The deposits earn 6% per year.
PV of Annuity Due = $2,494.32
Present value of an annuity of $456 to be received at the end of each year for three years discounted at 10.2% APR
PV of Annuity = 456/(1.102) + 456(1.102)2 + 456(1.102)3
PV of Annuity = 413.79 + 375.49 + 340.73
PV of Annuity = $1,130.01
Present value of $400 to be received at the beginning of each year for four years if the discount rate is 11%
PV of Annuity Due = $1,377.49
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