Question
The annually compounded discount rate is 13.5%. You are asked to calculate the present value of a 16-year annuity with payments of $51,800 per year.
The annually compounded discount rate is 13.5%. You are asked to calculate the present value of a 16-year annuity with payments of $51,800 per year.
| a. | Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now. |
| b. | Calculate the PV if the first payment arrives in six months. Following payments arrive at one-year intervals (i.e., at 18 months, 30 months, etc.). |
| $ |
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Handbook Of Heavy Tailed Distributions In Finance
Authors: S.T Rachev
1st Edition
0444508961, 9780444508966
