Brief Exercise G-8

For each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the discount rate. (1) In Table 3 (Present Value of 1):

Annual Rate Number of Years Involved Discounts per Year Case A 10% 5 Annually Case B 9% 14 Annually Case C 7% 9 Semiannually

(a) (b) Case A % periods Case B % periods Case C % periods

(2) In Table 4 (Present Value of an Annuity of 1):

Annual Rate Number of Years Involved Number of Payments Involved Frequency of Payments Case A 12% 18 18 Annually Case B 10% 8 8 Annually Case C 10% 4 8 Semiannually

(a) (b) Case A % periods Case B % periods Case C % periods