Calculate the monthly payment of a similar annuity due (term of 10 years and a payment interval of 6 months; the interest rate is 6%/year) that generates the same accumulated as case A, but now when an additional initial payment (so at the beginning of the first payment interval) of 50.000 is done. Explain the difference with the first case.

Here you only need to use one calculation method.

Extra information:

Case A:

A simple annuity due has a term of 10 years and a payment interval of 6 months. The interest rate is 6%/year; payments are 20.000 .

Calculate the accumulated and the discounted value twice using 2 of the following methods:

• Excellent Excel
• A table calculation in Excel
• A calculation using the build in functions of Excel

Solution to case A:

A table calculation in Excel
FV (Accumulated ) = $20000 x (FVAD(3%,20)
FV (Accumulated ) = $20000 x 27.6765	$ 553,530.00
PV( discounted) = $20000 x (PVAD(3%,20)
PV( discounted) = $20000 x 15.3238	$ 306,476.00
A calculation using the build in functions of Excel
FV(Accumulated)
Semiannual Payments	$ 20,000.00
Rate = 6%/2	3%
Period = 10 x 2	20
Present Value	0
Type	1
Future Value =	$553,529.71
PV(discounted)
Semiannual Payments	$ 20,000.00
Rate = 6%/2	3%
Period = 10 x 2	20
Present Value	0
Type	1
Present Value =	$306,475.98