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Find the present value of the following ordinary simple annuity Periodic Payment Payment Interval Term Interest Rate 5769
Find the present value of the following ordinary simple annuity Periodic Payment Payment Interval Term Interest Rate 5769.00 6 months 8 years 5% Conversion Period semi-annually The present value is $0 {Round the final answer to the nearest cont as needed Round all intermediate values to six decimal places as needed)
Expert Solution
Answer )
Present Value(PV) = CF * (PVAF (r%,n Years))
where CF = Cash Flows i.e. Periodic Payment
PVAF = Present Value Annuity Factor i.e. {1 / (1+r)n}
r = Rate
n = No. of Years ( or we can say total periods)
(NOTE :- It is assume that payments are made at end of period )
PV = 769 * (PVAF ( 2.5% , 16)
{ Where r = 5% / 2 i.e. 2.5%
n = 8years * 2 = 16 }
PV = 769* 13.055003
PV = $10039 (approx)
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