Determine the discounted value of an annuity of $380 at the end of each half-year for...

Determine the discounted value of an annuity of $380 at the end of each half-year for 3 years at a) j2 = 8%, b) j2 = 6%, c) j2 = 10.38%.

Expert Solution

discount value of an annuity is,

PV = FV X Discount Factor . , Discount factor = 1 / (1+r)ⁿ

accordingly , the cash flow of annuity for the period is 380 for every 6 months. NO. of years will start from 0.5 and will increase by 0.5 for each annuity tilll 3 years.

the discount factor at the rate for respective periods is applied and multipled with the annuity cash flow to arrive at the discounted value of annuity.

excel formula are

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jeff jeffy answered 2 years ago

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Determine the discounted value of an annuity of $380 at the end of each half-year for...

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