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Question 5 . Suppose you are going to receive $ 1 0 , 0 0 0 per year for five years. The discount rate is

Question

5 .

Suppose you are going to receive $

10, 000

per year for five years. The discount rate is

11 % .

.

What is the PV of the payment if they are in the form of an ordinary annuity? What is the PV if the payments are an annuity due?b

.

Suppose you plan to invest the payments for

5

years. What is the FV if the payments are an ordinary annuity? What if the payments are an annuity due?

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