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    Annuity Values

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    a) What is the present value of a 3-year annuity of $100 if the discount rate is 6 percent?

    b) What is the present value of the annuity from part (a) of this question if you have to wait 2 years instead of 1 year for the payment stream to start?

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    Solution Preview

    The present value of a $1 annuity is equal to:
    [1/r] - [1/(r * (1 + r)^t)] where r is the ...

    Solution Summary

    This solution looks at annuity values.