Excel File
| Chapter 4 - 49 | ||||
| Suppose you are going to receive $17,500 a year for five years. | ||||
| The appropriate rate is 7.4%. | ||||
| a) what is the PV of the payments if they are in the form of an ordinary annuity? | ||||
| PMT | 17500 | |||
| Nper | 5 | |||
| i | 0.074 | |||
| PV | $70,991.47 | =PV(D10,D9,-D8) | ||
| What is the PV of an annuity due? | ||||
| PVA due = PV of ordinary annuity at t – 1 payments, + payment that occurs today | ||||
| PV | $76,244.84 | =PV(D10,D9-1,-D8)+D8 | ||
No comments:
Post a Comment