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Please make sure to complete all parts of the question and to show all work used...

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Finance

Please make sure to complete all parts of the question and toshow all work used to compute the answer so I can see how theanswer was found.

A five-year annuity of 10 $5,230 semiannual payments will beginnine years from now, with the first payment coming nine and a halfyears from now. If the discount rate is 10 percent compoundedmonthly, what is the value of this annuity five years from now?What is the value three years from now? What is the current valueof the annuity?

Answer & Explanation Solved by verified expert
3.8 Ratings (634 Votes)
Discount rate per annum is 10 per annum compounded monthly hence effective semiannual rate shall be 111261 105105331331 0510533133 or 511 approx And Effective annual rate shall be1112121 104713 or 104713 Computation of value    See Answer
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Transcribed Image Text

Please make sure to complete all parts of the question and toshow all work used to compute the answer so I can see how theanswer was found.A five-year annuity of 10 $5,230 semiannual payments will beginnine years from now, with the first payment coming nine and a halfyears from now. If the discount rate is 10 percent compoundedmonthly, what is the value of this annuity five years from now?What is the value three years from now? What is the current valueof the annuity?

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