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Accounting

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For each of the following cases, calculate the present value of annuity, assuming the annuity cash flows occur at the end of each year. #1 Annuity/ $33,000/ Interest rate/18%/ 4 years? #2 Annuity/ $18,000/ Interest rate/ 9%/ 12 years? Round to the nearest cent
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We use the following formula: PV = (C/i)*(1  (1+i)^ n)
Where: PV is the present value of the annuity, C is the cash flow of the annuity, i is the interest rate in decimal form, and n is the number of periods (number of years).
So for part A we have: C = $33,000 , i = 18% = 18/100 = 0.18 , n = 4.
PV = (C/i)*(1  (1+i)^ n) > PV = (33,000/0.18)*(1  (1+0.18)^ 4) = (183333.333333)*(1  (1.18)^ 4 )
PV = (183333.333333)*(1  0.51578888) = (183333.333333)*(0.48421112) = 88772.038 = $88772.0
So for part B we have: C = $18,000 , i = 9% = 9/100 = 0.09 , n = 12
PV = (C/i)*(1  (1+i)^ n) > PV = (18,000/0.09)*(1  (1+0.09)^ 12) = (200000)*(1  (1.09)^ 12 )
PV = (200000)*(1  0.355535) = (200000)*(0.644465) = 128893 = $128893.0
Please let me know if you have any doubt or question.
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