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    Present value of an annuity

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    a. What is the present value of a 3-year annuity of $170 if the discount rate is 5%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

    Present value $

    b. What is the present value of the annuity in (a) if you have to wait 2 years instead of 1 year for the first payment? (Round your intermediate and final answers to 2 decimal places.)

    Present value $

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    Solution Preview

    a. What is the present value of a 3-year annuity of $170 if the discount rate is 5%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 

      Present value ...

    Solution Summary

    This solution helps in computing the present value of an annuity.

    $2.19

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