Answered: A. What is the value of the annuity 5…

Business

Accounting

A. What is the value of the annuity 5 years from now? B. What is the current value of the annuity?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A 5-year annuity of ten $50,000 semi-annual payments will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 12% per annum compounded monthly: A. What is the value of the annuity 5 years from now? B. What is the current value of the annuity?

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