Find the present value of the ordinary annuity. $3000/semiannual period for 5 years at 4%/year compounded semiannually
Find the present value of the ordinary annuity. $3000/semiannual period for 5 years at 4%/year compounded semiannually
Use this formula to calculate PV of the annuity:
PV=P{[1 + R]^N - 1 / [1 + R]^N} / R
PV = 3,000 x {[1 + 0.04/2]^(5*2) - 1 / [1 + 0.04/2]^(5*2)} / [0.04/2]
PV = 3,000 x 8.982585.....
PV = $26,947.76
