Find the present value of a sequence of annual payments of Eur. 4.000 each, the

Question

Find the present value of a sequence of annual payments of Eur. 4.000 each, the first being made at the end of 5 years and the last at the end of 10 years, if money is worth 5% effective. Find the present value of a sequence of annual payments of Eur. 25.000 each, the first being made at the end of 7 years and the last at the end of 16 years, if money is worth 7% effective. Mr. X buys a piece of land for which he agrees to make 10 annual payments of Eur 150.000 each, first being made at the end of 3 years find the equivalent cash price of this property, if money is worth 5% effective. A man borrows a certain sum of money at 10% per annum compound interest and agrees to pay both the principal and interest in 20 equal semi-annual instalments of Eur. 8.000 each. If the first instalments is to be paid at the end of 5 years from the date of borrowing and the other instalments are paid regularly at the end of subsequent 6 months, find the sum borrowed by him. Find the present value of an annuity consisting of 52 monthly payments of Eur. 250 each, the first being made at the end of 2 years if money is worth 5% compounded monthly. What is the present values of an annuity of Eur. 400 payable at the end of every month, if the first payment is made at the end of 3 years and last at the end of 7 years and money is worth 12% per annum compounded monthly? A company buys a machine for Eur. 230.000 and agrees to make 10 annual payments, the first being made at the end of 3 years, find the annual payment, if the money is worth 6% effective. 1. 2. 3. 4. 5. 6. 7.

Explanation / Answer

1)Present Value=4000×[PVAF(10,5%)-PVAF(5,5)]

=4000×[7.7217-4.3295]

=4000×3.3922

=13569 Euro

2)Present Value=25000[PVAF(7,16)-PVAF(7,7)

=25000[9.4466-5.3893]

=25000×4.0573

=Euro101433

3)Present Value=150000[Pvaf(13,5)-Pvaf(3,5)]

=150000(9.3936-2.7232)

=150000(6.6704)

=100560 Euro

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