Find the term of the ordinary annuity in years and months (from 0 to 11 months).PresentPeriodicRent$900PaymentIntervalInterestConversionValueRatePeriod$20,0003 months4.7%quarterlyShe can make withdrawals for year(s) andmonth(s).

Present value of annuity = $20000 Quarterly rent (Q) = $900 r = 4.7% per annum = 1.175% per quarter…

Find the term of the ordinary annuity in years and months (from 0 to 11 months). Present Value $20,000 Periodic Rent $900 Payment Interval 3 months Interest Rate Conversion Period 4.7% quarterly She can make withdrawals for year(s) and month(s).

Find the term of the ordinary annuity in years and months (from 0 to 11 months). Present Value $20,000 Periodic Rent $900 Payment Interval 3 months Interest Rate Conversion Period 4.7% quarterly She can make withdrawals for year(s) and month(s).

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 20E

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Find the term of the ordinary annuity in years and months (from 0 to 11 months).
Present
Periodic
Rent
$900
Payment
Interval
Interest
Conversion
Value
Rate
Period
$20,000
3 months
4.7%
quarterly
She can make withdrawals for year(s) and
month(s).

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