Answered: Q5. At 5% annual interest, what is the…

Q5. At 5% annual interest, what is the difference in the present and future value of P100 paid at the end of each year for 10 years and P100 paid at the beginning of each year?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

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(a) Identify the Given and the Unknown or what is being asked in the problem

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(d)Box the final answer. however, the final answer is already included in the problem, what you need to do is to match your answer and the answer in the book. Because in the book they only provide the answer but not the solution.

Problem:

Q5. At 5% annual interest, what is the difference in the present and future value of P100 paid at the end
of each year for 10 years and P100 paid at the beginning of each year?
Answer: P value difference = P88.61, F value difference = P62.89

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