Question

A. What is the present value of a 20-year $6,000 ordinary annuity paid annually and earning 5% interest?

B. Repeat for an annuity due.

Answer #1

**Answer-**

**Given**

**Annual payment = PMT = $ 6000
Interest rtae = I/Y = 5 %
Number of years = N = 20
Future value = FV = $ 0
Preent value = PV = ?**

**A ) Ordinary annuty - the condition is that the annual
payment 0f $ 6000 is made at the endof year.**

**Syubstituting the above values in calculator we
get**

**Present value = PV = $ 74773,26**

**B) Annuity due - the condition is thta the annual
paymnet of $ 6000 is made at the beginning of the year**

**Setting the financial calculator at the beginning mode
we get**

**Syubstituting the above values in calculator we
get**

**Prsent value = PV = $ 78511.92**

What is the present value of a 20-year $10,000 ordinary annuity
paid annually and earning 6% interest? In other words, if an
ordinary annuity paid $10,000 annually for 20 years, earning 6%
interest, what is the present value this annuity?

Regarding the present value of an annuity, the present value of
a nine year ordinary annuity will always be worth less compared to
the present value of a nine year annuity due.
i think it is true, please verify i am correct!

If the present value of an ordinary, 2-year annuity is $6,600
and interest rates are 10 percent, what's the present value of the
same annuity due?

If the present value of an ordinary, 4-year annuity is $5,000
and interest rates are 10 percent, what's the present value of the
same annuity due?

What is the present value of an ordinary annuity paying
$1 comma 7501,750
each year for
1515
years, with an interest rate of
7.37.3
percent compounded annually? (Round to the nearest
dollar.)
A.
$15 comma 64115,641
B.
$14 comma 41114,411
C.
$20 comma 45420,454
D.
$18 comma 122

Present value of an ordinary annuity and annuity due.
Jill Morris is presently leasing a small business computer from
Eller Office Equipment Company. The lease requires 10 annual
payments of $6,000 at the end of each year and provides the lessor
(Eller) with an 8% return on its investment. You may use the
following 8% interest factors:
9 Periods
10 Periods
11 Periods
Future Value of 1
1.99900
2.15892
2.33164
Present Value of 1
.50025
.46319
.42888
Future Value of...

Present value of an ordinary annuity and annuity due. (Show your
work)
Jill Morris is presently leasing a small business computer from
Eller Office Equipment Company. The lease requires 10 annual
payments of $6,000 at the end of each year and provides the lessor
(Eller) with an 8% return on its investment. You may use the
following 8% interest factors:
9 Periods 10
Periods 11 Periods
Future Value of
1
1.99900
2.15892
2.33164
Present Value of
1
.50025
.46319 ...

is the present value of an ordinary annuity larger than the
present value of an annuity due?

f. What is the present value of an ordinary annuity of $1,300
per year for 11 years discounted back to the present at 11
percent?
g. What is the present value of an annuity due of $1,300 per
year for 11 years discounted back to the present at 11
percent?

What is the future value of a 12-year ordinary annuity of $350
if the interest rate is 6.5%? What is the present value of the
annuity? Hint: Solve for PV. What is the future value and present
value if the annuity were an annuity due?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 11 minutes ago

asked 12 minutes ago

asked 12 minutes ago

asked 12 minutes ago

asked 12 minutes ago

asked 18 minutes ago

asked 22 minutes ago

asked 29 minutes ago

asked 31 minutes ago

asked 33 minutes ago

asked 56 minutes ago