Question

Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.

$ 50,570 receivable at the end of each period for  9 periods compounded at  11%.

$ 50,570 payments to be made at the end of each period for  17 periods at  10%.

$ 50,570 payable at the end of the seventh, eighth, ninth, and tenth periods at  11%.

Answer 1

case A:

50,570 receivable at end of each period for 9 periods compounded at 11%.

appropriate table = present value of annuity factor table.

50,570 * present value of annuity factor 11% for 9 periods.

=>50,570 * (5.53705)....................(value from PVA of $1 table)

=>$280,008.62.

case B:

$50,570 payments made at end of each period for 17 periods at10%.

relevant table =present value of annuity factor table.

50,570 *(present value of annuity factor for 10% for 17 periods)

=>50,570*(8.02155)

=>$409,649.78....(or) $409,650..(rounded off to nearest dollar).

case C;

$50,570 payable at end of 7th , 8th 9th and 10th periods.

relevant table = preset value of $1 table.

year	present value of $1 factor (from PV of $1 table at 11%)	present value of amount
7	0.48166	(50,570*0.48166)=>24,357.55
8	0.43393	(50,570*0.43393)=>21,943.84
9	0.39092	(50,570*0.39092)=>19,768.82
10	0.35218	(50,570*0.35218)=>17,809.74
	total	83,899.95 (or)83,900 (rounded off)

present value of series of payment in case C = $83,900.