ECONOMICS
FINANCIAL MARKETS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
$3, 037.35
|
|
|
$3, 401.83
|
|
|
$3, 401.83
|
|
|
$4, 604.78
|
Detailed explanation-1: -The formula for calculating the present value (PV) of an annuity is equal to the sum of all future annuity payments – which are divided by one plus the yield to maturity (YTM) and raised to the power of the number of periods.
Detailed explanation-2: -Find the present value and the amount (future value) of an ordinary annuity of P5, 000 payable semi-annually for 10 years if money is worth 6% compounded semi-annually. 1. Answer: P = P74, 387.37, F = P134, 351.87 2.
Detailed explanation-3: -What is the present value of an annuity due of $2, 000 a year for 3 years assuming an interest rate of 7%? The present value of an annuity due of $2, 000 a year for 3 years assuming an interest rate of 7% is equal to $5, 616.03.
Detailed explanation-4: -You will get more money for annuity payment streams the sooner the payment is owed. The present value of an annuity can be calculated using the formula PV = PMT * [1 – [ (1 / 1+r)^n] / r] More items