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Assume that you are attempting to find the present value of a 50-period, $100 annuity,where the first payment takes place at Period 1, and the
Assume that you are attempting to find the present value of a 50-period, $100 annuity,where the first payment takes place at Period 1, and the last payment takes place at Period 50 (some people would describe this as a regular annuity). However, theseannuity payments are growing at a constant rate of 10 percent, so you will actuallyreceive $110.00 at Period 1, $121.00 at Period 2, $133.10 at Period 3, etc. Finallyassume that your required rate of return is 8 percent. Determine the present value, at Period 0, of this annuity.
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