1. Kurt wants to have $835,000 in an investment account six years from now. The account will pay 8.04 percent interest per year. He makes equal payments of $9,062.07 into this ordinary annuity for each of the six years.

   Hint: dont pay attention to Kurts future value (i.e. ignore it.

   Present Value of an Ordinary Annuity and an Annuity Due, using the information directly from above,

   a) What would be the present value of Kurts savings annuity, when treated as an ordinary annuity, PVA?

   b) What would be the amount if treated as an Annuity Due?

   Be sure to include a cash flow time line with all variables with directional arrows moving to the left or right side and then summing to arrive at answer.

6) Kurt wants to have $835,000 in an investment account six years from now. The account will pay 8.04 percent interest per year. He makes equal payments of $9,062.07 into this ordinary annuity for each of the six years. Hint: don't pay attention to Kurt's future value (i.e. ignore it. Present Value of an Ordinary Annuity and an Annuity Due, using the information directly from above, a) What would be the present value of Kurts savings annuity, when treated as an ordinary annuity, PVA? b) What would be the amount if treated as an Annuity Due? | 8 Be sure to include a cash flow time line with all variables with directional arrows moving to the left or right side and then summing to arrive at answer. The following info may help you for the next problem on annuities: Formulas for ordinary annuities, which are paid at the end of each period, for present value is: The formula for present value of an ordinary annuity on an annual basis is: 1 1- (1+r)' PVA = PMT = r monumentale moment TIP: 1 (1 + r)' PVA = PMT r *(1+r) is an annuity due, just multiply your present value of the ordinary annuity by an extra discounting/compounding period Continued on next page