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Example Calculation of Present Values

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An annuity pays $250 per year and the discount rate is 10%.

A. What is the present value of a 5 year annuity?

B. PV of a 10 year annuity?

c. PV of a 100 years annuity?

d.What is the present value of a perpetuity?

e. Do you detect a relationship between the number of periods of an annuity and its resemblance to a perpetuity?

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The solution shows step by step calculation of annuities over different periods.

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An annuity pays $250 per year and the discount rate is 10%. A.What is the Present value of a 5 yr. annuity ? B. PV OF A 10 YR. ANNUITY c. PV OF A 100 yR. ANNUITY d.wHAT IS THE PRESENT ...

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Manal Elkhoshkhany, MBA
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  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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