Determining annuity assessment

Reference no: EM1327274

What is the relationship between the present value of a single dollar payment formula and the present value of an ordinary annuity formula for the same number of years and the same discount rate? Assume a discount rate of 10 percent and an n value of five periods. Explain with an example.

Compare the results of the present value of a $6,000 ordinary annuity at 10 percent interest for ten years with the present value of a $6,000 annuity due at 10 percent interest for eleven years. Explain the difference.

Reference no: EM1327274

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