Author Question: Johnson has an annuity due that pays 600 per year for 15 years. What is the present value of the ... (Read 75 times)

dalyningkenk

  • Hero Member
  • *****
  • Posts: 598
Johnson has an annuity due that pays 600 per year for 15 years. What is the present value of the cash flows if they are discounted at an annual rate of 7.50?
 
  A) 5,296.27
  B) 5,693.49
  C) 9,000.00
  D) 9,675.00

Question 2

A series of equal periodic finite cash flows that occur at the beginning of the period are known as a/an ________.
 
  A) ordinary annuity
  B) annuity due
  C) perpetuity
  D) amortization



okolip

  • Sr. Member
  • ****
  • Posts: 362
Answer to Question 1

Answer: B
Explanation: B)
PV = PMT   (1 + r)1 = 600   (1.075)1 = 5,693.49.
MODE = BEGIN
INPUT 15 7.5 ? -600 0
KEY N I/Y PV PMT FV
CPT 5,693.49

Answer to Question 2

Answer: B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

Vaccines prevent between 2.5 and 4 million deaths every year.

For a complete list of videos, visit our video library