Question

For each of the following annuities, calculate the present value. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Present Value	Annuity Payment	Years	Interest Rate
	$2,550	7	8	%
	$1,445	9	7
	$12,955	20	9
	$32,900	26	11

Answer 1

Annuity 1.

Using financial calculator to calculate the present value of annuity

Inputs: N= 7

I/y= 8%

Pmt= 2,550

Fv= 0

Pv= compute

We get, present value of annuity 2,550 as $13,276.24

Annuity 2

Using financial calculator to calculate the present value of annuity

Inputs: N= 9

I/y= 7%

Pmt= 1,445

Fv= 0

Pv= compute

We get, present value of annuity 1,445 as $9,414.51

Annuity 3

Using financial calculator to calculate the present value of annuity

Inputs: N= 20

I/y= 9%

Pmt= 12,955

Fv= 0

Pv= compute

We get, present value of annuity 12,955 as $118,260.31

Annuity 4

Using financial calculator to calculate the present value of annuity

Inputs: N= 26

I/y= 11%

Pmt= 32,900

Fv= 0

Pv= compute

We get, present value of the annuity 32,900 as $279,257.12

All the answers are in bold