Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value
Question:
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2021, of a five-period annual annuity of $5,000 under each of the following situations:
1. The first payment is received on December 31, 2022, and interest is compounded annually.
2. The first payment is received on December 31, 2021, and interest is compounded annually.
3. The first payment is received on December 31, 2022, and interest is compounded quarterly.
An 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,...
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1 PVA 5000 360478 18024 Present value of an ordinary annuity of 1 n 5 i 12 from Table 4 2 PVAD 5000 403735 20187 Present value of an annuity due of 1 n 5 i 12 from Table 6 3 PV of 1 Payment i 3 PV n F...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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