Monday

September 1, 2014

September 1, 2014

Posted by **jule** on Thursday, August 9, 2012 at 6:13pm.

1. calculate the present value, pv1 of annuity payment at the end of the period of deferral

2. calculate the present value, pv2 of the payment at the beginning of the period of deferral

- math -
**Reiny**, Thursday, August 9, 2012 at 8:35pmMake 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.

- math -
**jule**, Thursday, August 9, 2012 at 8:53pman ordinary annuity starting today with eight annual payments of $900

**Answer this Question**

**Related Questions**

algebra - john borrowed $650 from credit union . interest rate is 7.9% , and ...

buissness math - Determine the total in Dexter's account after the second month ...

Consumer math !!!! please check - Determine the total in Dexter's account after...

Finance - Gemini Real Estate is offered a $2 million line of credit for four ...

FINANCE - Gemini Real Estate is offered a $2 million line of credit for four ...

Maths - Car loan interest rate is 7% loan payment $600 month 36 months left on ...

Business Math - Terry has an 18-month installment loan for $1,700 at 12% annual ...

English - I need to know whether I have at least five adjectives and five ...

business/math - what is the answer to: you obtain a margin loan of 18000 to ...

math - John borowed 12,000 and agreed to repay the loan in six equal monthly ...