Find the present value of the following ordinary annuities. Round your answers t
ID: 2682732 • Letter: F
Question
Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to "BEG," press FV, and find the FV of the annuity due.)a.$200 per year for 10 years at 6%.
$
b.$100 per year for 5 years at 3%.
$
c.$200 per year for 5 years at 0%.
$
Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
d.$200 per year for 10 years at 6%.
$
e.$100 per year for 5 years at 3%.
$
f.$200 per year for 5 years at 0%.
$
Explanation / Answer
a.$200 per year for 10 years at 6%. PV of anuity = PV(Rate,nper,PMT) = PV(6%,10,-200) = $1,472 b.$100 per year for 5 years at 3%. PV of anuity = PV(Rate,nper,PMT) = PV(3%,5,-100) = $458 c.$200 per year for 5 years at 0%. PV of anuity = PV(Rate,nper,PMT) = PV(0%,5,-200) = $1000 Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due. d.$200 per year for 10 years at 6%. PV of anuity due = PV(Rate,nper,PMT,PV,type) = PV(6%,10,-200,,1)= 1,560 e.$100 per year for 5 years at 3%. PV of anuity due = PV(Rate,nper,PMT,PV,type) = PV(3%,5,-100,,1) = 472 f.$200 per year for 5 years at 0%. PV of anuity due = PV(Rate,nper,PMT,PV,type) = PV(0%,5,-200,,1)= 1000
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