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The annually compounded discount rate is 9.5%. You are asked to calculate the present value of a 19-year annuity with payments of $51,000 per year.

a. Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now.

Present Value =

b. Calculate the PV if the first payment arrives in six months. Following payments arrive at one-year intervals (i.e., at 18 months, 30 months, etc.).

Present Value =

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92414834

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