Calculating present value of annuity
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What is the present value of the following annuities?
a. $2,500 a year for 10 years discounted back to the present at 7 percent
b. $70 a year for 3 years discounted back to the present at 3 percent
c. $280 a year for 7 years discounted back to the present at 6 percent
d. $500 a year for 10 years discounted back to the present at 10 percent
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Solution depicts the steps to find out the present value of given annuities.
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a. $2,500 a year for 10 years discounted back to the present at 7 percent.
C=periodic payment=$2500
n=number of period=10
i=discount rate per period=7%
Present Value (P)of an ordinary annuity is given ...
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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