15. The present value of an annuity-certain of 1 p.a. payable for an exact number of years at a given effective rate of interest is 23.19594, if payments are made half-yearly; and 23.31032 if payments are made quarterly. The amount of the annuity if payments were made yearly would be 282.6619. Calculate the term of the annuity and the effective rate of interest p.a.
Added by Paul D.
Close
Step 1
If payments are made quarterly, there are 4 payments in a year (quarterly payments). If payments were made yearly, there would be 1 payment in a year (annual payment). Let's assume the term of the annuity is "n" years. If payments are made quarterly, the Show more…
Show all steps
Your feedback will help us improve your experience
Crystal Wang and 71 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
The compounding periods and the payment periods are the same for an annuity and for an amortization. Determine the present value of the annuity that will pay the given periodic payments. (Round your final answer to two decimal places.) Semimonthly payments of $50 for 15 months at a monthly interest rate of 1.6%.
Nick J.
Determine the present worth of an annuity consisting of 6 payments of P 120,000 each, the payment are made at the beginning of each year. Money is worth 15% compounded annually. a. P 52,226.40 b. P 134,879.78 c. P 120,801.60 d. P 35,876.98
Narayan H.
Use i=r/n to compute the future value of the annuity with the given terms. In all cases, assume the payment is made monthly, the interest rate given is the annual rate, and interest is compounded monthly. Payments are $300, intrest rate is 2.5%, term is 17 years.
David M.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD
