Question

An annuity is set up that will pay $ 1200 per year for eight years. What is the present value​ (PV) of this annuity given that the discount rate is 7​%?

Answer 1

for --PV(C2,C3,C4,C5,C6) B 1 0 .07|| ст А 1 2 RATE(i/y) | 3 NPER(n) 4 PMT 5 FV 6 TYPE 7 PV 8 Rate Per Period Total No.of periods Payment per period Future value Ending(0), Beginning(1) 1200 Present Value $ 7,165.56 (-PV(0.07,8,1200,0,0)) (-PV(rate,nper,pmt,fv,type))

010 - 1 year Cash flows 2 1 $ 1,200.00 3 2 $ 1,200.00 3 $ 1,200.00 4 $ 1,200.00 5 $ 1,200.00 6 $ 1,200.00 7 $ 1,200.00 8 $ 1,200.00 fi =SUM(D2:09) C pv@7% Present value 0.9346 $ 1,121.50 0.8734 $ 1,048.13 0.8163 $ 979.56 0.7629 $ 915.47 0.7130$ 855.58 0.6663 $ 799.61 0.6227 $ 747.30 0.5820 $ 698.41 NPV $ 7,165.56

D10 fic =SUM(D2:09) 1 year 2 1 32 Cash flows 1200 1200 1200 1200 1200 1200 1200 1200 pv@7% =1/1.07 =C2/1.07 =C3/1.07 =C4/1.07 =C5/1.07 =C6/1.07 =C7/1.07 =C8/1.07 NPV Present value =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 =B7*07 =B8C8 =B9*C9 I=SUM(D2:09) 98 10 11