QQuestionAnatomy and Physiology
QuestionAnatomy and Physiology
Calculate the present value of a $\$ 10,1$ perpetuity at a 6 percent discount rate.
Calculate the future value of an annuity of $\$ 5,1$ each year for eight years, deposited at 6 percent.
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Step 1I'll solve both problems step by step using precise LaTeX formatting:
Problem 1: Present Value of Perpetuity
Step 2: Recall the perpetuity present value formula
- $$r$$ = Discount rate
Where:
Final Answer
Problem 2: Future Value of Annuity Step 1: Use the future value of annuity formula FV = PMT \cdot \frac{(1 +r)^{n}- 1}{r} Where: - PMT = Periodic payment - r = Interest rate - n = Number of periods Step 2: Plug in the given values - PMT = \$5,000 - r = 0.06 (6%) - n = 8 years Step 3: Calculate the future value FV = 5,000 \cdot \frac{(1 + 0.06)^{8}- 1}{0.06} FV = 5,000 \cdot \frac{1.5938 - 1}{0.06} FV = 5,000 \cdot \frac{0.5938}{0.06} FV = 5,000 \cdot 9.8967 FV = \$49,483.50
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