Suppose you are going to receive $10,000 per year for 6 years. The appropriate interest rate is 10 percent.
(a) What is the present value of the payments if they are in the form of an ordinary annuity?
a) 50,756.92
b) 68,136.92
c) 88,632.52
d) 43,552.61
e) 47,907.87
(b) What is the present value if the payments are an annuity due?
a) 43,552.61
b) 47,907.87
c) 74,950.61
d) 93,064.14
e) 53,294.77
Requirement 2:
(a) Suppose you plan to invest the payments for 6 years, what is the future value if the payments are an ordinary annuity?
a) 159,171.27
b) 77,156.10
c) 84,871.71
d) 213,842.84
e) 68,019.13
(b) Suppose you plan to invest the payments for 6 years, what is the future value if the payments are an annuity due?
a) 167,129.83
b) 71,420.08
c) 235,227.12
d) 77,156.10
e) 84,871.71