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FIN 3414, Fall 2017: Insert Page Layout Formulas Data Review View Shape Format X out Copy Wrao Text Formatting as Table 1 COMPUTING THE VALUE
FIN 3414, Fall 2017: Insert Page Layout Formulas Data Review View Shape Format X out Copy Wrao Text Formatting as Table 1 COMPUTING THE VALUE OF A FINITE ANNUITY 3 Periodic Payment, P 4 1000 Number of Periods, n S Discount Rate, r 10% 7 Find the value of the annuity using 8 Annuity Formula 9 Using PV function 10 Hint: The formula for the present value of an annuity paying a constant periodic payment P at an interest rate of r for n periods is given by PVA(P, r, n)=P Year Cash flow 12 13 14 15 16 17 18 Find the present value of the annuity using:Hint: Use the cash flows in the above table 19 Using NPV function 1 1,000.00d 2 1,000.00 3 $1,000.00 4 $ 1,000.00 5 $ 1,000.00 as inputs to the NPV function. 21 23 24 26 27 28 29 31 32
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