Question

2. Fill in the missing amounts in each independent column: A, B, and C (TVM of an Annuity): Present Value Future Value Years Interest Rate Payment A (Annual) ? ΝΙΑ 10 8% $12,000 B (Annual) $150,000 ΝΙΑ 15 6% ? (Annual) N/A ? 5 8% $3,500

Answer 1

Case A $ Annuity Payment amount i = n = 12,000 8% 10 6.71008 80,521 PVAF (i=8%, n=10) Present Value amount (From PVA table) (12000*6.71008) $ Case B $ Present Value amount i = n = 150,000 6% 15 9.71225 15,444 PVAF (i=6%, n=15) (From PVA table) Annuity Payment amount (150000/9.71225) $ Case C $ Annuity Payment amount i = n = 3,500 8% 5 5.86660 20,533 FVAF (i=8%, n=5) Future Value amount (From FVA table) (3500*5.86660) $ Conclusion B $ $ Present Value Future Value Years Interest Rate Payment А (Annual) 80,521 $ N/A 10 8% 12,000 $ B (Annual) 150,000 N/A $ 15 6% 15,444 $ с (Annual) N/A 20,533 5 8% 3,500 $