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##### Chapter 6 Q10 Suppose you are going to receive \$1...

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Chapter 6 Q10 Suppose you are going to receive \$10,000 per year for five years. The appropriate interest rate is 11 percent. Requirement 1: (a) What is the present value of the payments if they are in the form of an ordinary annuity? (Do not include the dollar sign (\$). Round your answer to 2 decimal places. (e.g., 32.16)) Present value of an ordinary annuity \$_____. (b) What is the present value if the payments are an annuity due? (Do not include the dollar sign (\$). Round your answer to 2 decimal places. (e.g., 32.16)) Present value of an annuity due \$______. Requirement 2: (a) Suppose you plan to invest the payments for five years, what is the future value if the payments are an ordinary annuity? (Do not include the dollar sign (\$). Round your answer to 2 decimal places. (e.g., 32.16)) Future value of an ordinary annuity \$______. (b) Suppose you plan to invest the payments for five years, what is the future value if the payments are an annuity due? (Do not include the dollar sign (\$). Round your answer to 2 decimal places. (e.g., 32.16)) Future value of an annuity due \$______.

Paper#10101 | Written in 18-Jul-2015

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