[slh6582]

I have done the work and gotten the answers but just want to see if they are correct. If they aren't can I get any hints? I'm not so sure about problem B.

E6-5 (Computation of Present Value) Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.

(a) $30,000 receivable at the end of each period for 8 periods compounded at 12%.
(b) $30,000 payments to be made at the end of each period for 16 periods at 9%.
(c) $30,000 payable at the end of the seventh, eighth, ninth, and tenth periods at 12%.


a. 30,000(4.96764)= 149,029.20
b. 30,000 (8.31256 *1.09) = 271,820.71
c. 30,000*(5.65022-4.11141) = 46,164.30

[morgaine300]

(b) is done exactly the same way as (a). The direction of the payment makes no difference to the math. I'm not sure why you chose to multiply it by 1.09, but don't. Everything you need is already built into the charts.

(a) and (c) are correct. I did (c) differently, and now I'll have to go ponder why your way works. :-)

[slh6582]

Thanks so much.. I'm not sure why I multiplied by that in B. I think I read something in my book saying for an annuity due to multiply it by 1 plus the interest rate. I reread it and it was talking about something totally different from this question. Thanks again.

[morgaine300]

Yes, an annuity due is when payments are at the beginning of the period, not the end. (And I don't think that's the correct adjustment, but I honestly don't remember because I never do them.)