Suppose you are going to receive $13,500 per year for five years. The interest rate is 8.4% a. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due? b. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? What if the payments are annuity due? c. Which has the highest present value (future value), the ordinary annuity or annuity due?
Suppose you are going to receive $13,500 per year for five years. The interest rate is 8.4% a. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due? b. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? What if the payments are annuity due? c. Which has the highest present value (future value), the ordinary annuity or annuity due?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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Suppose you are going to receive $13,500 per year for five years. The interest rate is 8.4%
a. What is the
b. Suppose you plan to invest the payments for five years. What is the
c. Which has the highest present value (future value), the ordinary annuity or annuity due?
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