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Homework answers / question archive / 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

Finance

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)

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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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