Find out the present value of the payments


Suppose you are going to receive $24,000 per year for 7 years. The appropriate interest rate is 9 percent.

Required:

  • What is the present value of the payments if they are in the form of an ordinary annuity?
  • What is the present value if the payments are an annuity due?
  • Suppose you plan to invest the payments for 7 years, what is the future value if the payments are an ordinary annuity?
  • Suppose you plan to invest the payments for 7 years, what is the future value if the payments are an annuity due?

Note: Please show how you came up with the solution.

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Finance Basics: Find out the present value of the payments
Reference No:- TGS0879503

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