Question
What is the PV of a 5 year annuity of $1000, with the first payment made at t=4, if the interest rate is 6% per
What is the PV of a 5 year annuity of $1000, with the first payment made at t=4, if the interest rate is 6% per year? (b) Now assume that the payments start at t = 3.5 (i.e., 6 months into the 4th year). There are still 5 payments and they are a year apart. Assume further that the 6-month interest rate is 3%, meaning that the EAR = (1.03)^2 - 1= 6.09%. What is the PV in this case?
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MATLAB An Introduction With Applications
Authors: Amos Gilat
6th Edition
111938513X, 978-1119385134
