Problem:
A 5-year annuity of ten $8,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.
Requirement:
Question 1: If the discount rate is 8 percent compounded monthly, what is the value of this annuity five years from now?
Question 2: If the discount rate is 8 percent compounded monthly, what is the value three years from now?
Question 3: If the discount rate is 8 percent compounded monthly, what is the current value of the annuity?
Note: Show supporting computations in good form.