HERE ARE THE QUESTIONS:

a) How would the formula change if the payment is at the end of each period, instead of the beginning? Please discuss and calculate the new PV if the payment is at the end of each period

b) Why would there be such a difference, please discuss.

3 Q19 1000 Question 19 Deposits of $1,000 are placed into a fund at the beginning of each year for the next 20 years. At the end of the 20th year, annual payments from the fund commence and continue forever. If the balance in the fund earns 8% p.a., find the value of these payments. 20 0.08 o $3,660.96 $3,953.83 $848.29 $1,600.00 $3,315.70 18 45.7619643 9 45761.9643 , 0 3660.957144 Value of the deposits at the time of the final deposit (at time 19) 1 FV = PMT (1+0)*-+] = 1,000 (1.08)20-1 0.08 = 45,761.964 12 3 C 4 Q6ACD PV = PMT 45, 761.964 = PMT 0.08 PMT= 3,660.96 18