Assume an ordinary annuity of $500 at the end of each of the next three years. 1.
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Assume an ordinary annuity of $500 at the end of each of the next three years.
1. What is the present value discounted at 10%?
2. What is the future value at the end of year 3 if cash flows can be invested at 10%?
AnnuityAn annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...
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Related Book For 
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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