Difference in the Present Value
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You are scheduled to receive annual payments of $15,000 for each of the next 13 years. The discount rate is 9 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?
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Solution Summary
This solution calculates the difference in the present value when one receives payments at the beginning of each year rather than the end of the year based on a 9 percent discount rate.
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Let us find out the present value in each of the cases
If the amount is received at the end
P=A*((1/r)-((1/(r*((1+r)^n)))
P=present value, A= Annuity ...
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