part 2

need help with 7

6. You are offered a 20-year annuity of S20,000 annual payments. However, the annuity begins in 3 years (you will not receive any payments for three years, but will then receive $20,000 at the end of each year for 20 years with the first payment arriving exactly 4 years from today). If the discount rate is 4 percent per year (compounded annually), what is the current value of the annuity? (10 points) Fu=0 -- 20006 Pm t Hz =$271,806.53/(1+43 $241,635:01 7. What is the effective annual rate for the following (10 points): a. 8% compounded quarterly b. 9% compounded semi-annually