Find the present value of the ordinary annuity. (Round your answer to the nearest cent.) $1500/semiannual...

Find the present value of the ordinary annuity. (Round your answer to the nearest cent.)

$1500/semiannual period for 7 years at 3%/year compounded semiannually

Solutions

Expert Solution

Present Value of annuity = Peroidic payment * PVAF ( Peroidic rate, Number of periods )

= 1500 * PVAF( 3%/2, 7 * 2 )

= 1500 * PVAF (1.5%, 14)

= 1500 * [ 1/1.015 + 1/1.015² + ...... + 1/1.015¹⁴ ]

= 1500 * 12.5434

= $ 18815.07 Answer

Hope you understand the solution.

jeff jeffy answered 1 year ago

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