Question

# A. What is the present value of a 20-year \$6,000 ordinary annuity paid annually and earning...

A. What is the present value of a 20-year \$6,000 ordinary annuity paid annually and earning 5% interest?

B. Repeat for an annuity due.

Given

Annual payment = PMT = \$ 6000
Interest rtae = I/Y = 5 %
Number of years = N = 20
Future value = FV = \$ 0
Preent value = PV = ?

A ) Ordinary annuty - the condition is that the annual payment 0f \$ 6000 is made at the endof year.

Syubstituting the above values in calculator we get

Present value = PV = \$ 74773,26

B) Annuity due - the condition is thta the annual paymnet of \$ 6000 is made at the beginning of the year

Setting the financial calculator at the beginning mode we get

Syubstituting the above values in calculator we get

Prsent value = PV = \$ 78511.92
{"found_math": false, "script_math_tex": 0, "script_math_asciimath": 0, "math_annotations": 0, "math_alttext": 0, "mathml": 0, "mathjax_tag": 0, "mathjax_inline_tex": 0, "mathjax_display_tex": 0, "mathjax_asciimath": 0, "img_math": 0, "codecogs_latex": 0, "wp_latex": 0, "mimetex.cgi": 0, "/images/math/codecogs": 0, "mathtex.cgi": 0, "katex": 0, "math-container": 0, "wp-katex-eq": 0, "align": 0, "equation": 0, "x-ck12": 0, "texerror": 0, "url": "https://justaaa.com/finance/349748-a-what-is-the-present-value-of-a-20-year-6000", "fetch_time": 1701670959000000000, "content_mime_type": "text/html", "warc_filename": "crawl-data/CC-MAIN-2023-50/segments/1700679100525.55/warc/CC-MAIN-20231204052342-20231204082342-00003.warc.gz", "warc_record_offset": 378242483, "warc_record_length": 9344, "token_count": 232, "char_count": 827, "score": 3.671875, "int_score": 4, "crawl": "CC-MAIN-2023-50", "snapshot_type": "latest", "language": "en", "language_score": 0.8720297813415527, "file_path": "/sailhome/yjruan/project/latent-lm/data/processed/finemath-4plus/finemath-4plus/train-00032-of-00064.parquet"}