A 6year annuity of twelve 11800 semiannual payments will beg

A 6-year annuity of twelve $11,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.

   

If the discount rate is 12 percent compounded monthly, what is the value of this annuity five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

   

     

If the discount rate is 12 percent compounded monthly, what is the value three years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

    

     

If the discount rate is 12 percent compounded monthly, what is the current value of the annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

     

A 6-year annuity of twelve $11,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.

Solution

1) PMT 11800 NPER 12 FV 0 Discount Rate 12% compounded monthly Equivalent discount Rate (semi annual compounding) 12.30% =((((1+12%/12)^12)^(1/2))-1)*2 PV after 9 years $98,120.86 =-PV(12.3%/2,12,11800,0,0) PV after 5 years $60,860.48 =-PV(12%/12,48,,98120.86,) 2) PV 3 yrs from now $47,931.65 =-PV(12%/12,24,,60860.48,) 3) Current value of annuity $33,500.63 =-PV(12%/12,36,,47931.65,)