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Present value of annuities and annuity payments The present value of an annuity is the sum of the discounted value of all future cash flows.
Present value of annuities and annuity payments
The present value of an annuity is the sum of the discounted value of all future cash flows.
You have the opportunity to invest in several annuities. Which of the following year annuities has the greatest present value PV Assume that all annuities earn the same positive interest rate.
An annuity that pays $ at the beginning of every six months
An annuity that pays $ at the end of each year
An annuity that pays $ at the end of every six months
An annuity that pays $ at the beginning of each year
You bought an annuity selling at $ today that promises to make equal payments at the beginning of each year for the next six years If the annuity's appropriate interest rate I remains at during this time, then the value of the annual annuity payment PMT is
You just won the lottery. Congratulations! The jackpot is $ paid in six equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won : assuming annual interest rate of
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