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You are scheduled to receive annual payments of $8,600 for each of the next 27 years....

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Finance

You are scheduled to receive annual payments of $8,600 for eachof the next 27 years. The discount rate is 7.0 percent. What is thedifference in the present value if you receive these payments atthe beginning of each year rather than at the end of each year?

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4.4 Ratings (681 Votes)
When the payment is received at the end of the year it is called ordinary annuity and when the payment is received at the beginning of the year it is called annuity due So first we will calculate PV of annuity due and then PC of ordinary    See Answer
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You are scheduled to receive annual payments of $8,600 for eachof the next 27 years. The discount rate is 7.0 percent. What is thedifference in the present value if you receive these payments atthe beginning of each year rather than at the end of each year?

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