Posted by jule on Thursday, August 9, 2012 at 6:13pm.
Make a time-line graph, marking months beginning at 0 (now), 1, 2, 3, ...
The way I interpret your question, the first payment will be at month 11 , then payments at 12, 13 and 14
Since the formula for an ordinary annuity assumes the first payment at the end of the first interest period, we would be finding PV1 at month 10
PV1 = 500(1 - 1.006666...^-4)/.0066666..
= 1967.106
2. now we have to "move back" this amount to the present time (now or time spot of 0)
PV2 = 1967.106(1.0066666...)^-10
= 1915.51
If the first payment is at month 12, make the appropriate changes.
an ordinary annuity starting today with eight annual payments of $900
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