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Suppose you are going to receive $14,400 per year for six years. The appropriate interest rate...

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Finance

Suppose you are going to receive $14,400 per year for six years.The appropriate interest rate is 9.5 percent.

a. What is the present value of the payments if they are in theform of an ordinary annuity?

b. What is the present value if the payments are an annuitydue?

Suppose you plan to invest the payments for six years.

c. What is the future value if the payments are an ordinaryannuity?

d. What is the future value if the payments are an annuitydue?

Answer & Explanation Solved by verified expert
4.3 Ratings (584 Votes)
Information provided Yearly payment 14400 Time 6 years Interest rate 950 aOrdinary annuity is the annuity that occurs at the end of the period This is calculator with the calculator in the end mode The present value of the annuity payments is calculated by entering the below in a financial calculator PMT 14400 N 6 IY 950 Press the CPT and PV to calculate the present value The    See Answer
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Transcribed Image Text

Suppose you are going to receive $14,400 per year for six years.The appropriate interest rate is 9.5 percent.a. What is the present value of the payments if they are in theform of an ordinary annuity?b. What is the present value if the payments are an annuitydue?Suppose you plan to invest the payments for six years.c. What is the future value if the payments are an ordinaryannuity?d. What is the future value if the payments are an annuitydue?

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