Calculate present value of the annuity

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Reference no: EM131954032

1. What is the present value of 10 annual payments of $600 at a discount rate of 12%?

a. $3,390

b. $1,332

c. $1,840

d. $1,761

e. $2,825

Please show work.

2. You just won the lottery. To supplement your income you will receive twenty payments of $300,000 to be paid at the end of each of the next twenty years. Using a discount rate of 6%, calculate the present value of the annuity.

a. $3,231,623

b. $3,293,984

c. $3,000,000

d. $2,975,754

e. $3,440,976

Please show work.

Reference no: EM131954032

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