Problem 2 Find the following values assuming a regular or ordinary annuity: The present value of $400 per year for ten years at 10 percent The future value of $400 per year for ten years at 10 percent – The present value of $200 per year for five years at 5 percent The future value of $200 per year for five years at 5 percent Assuming a. A regular or ordinary annuity b. An annuity due

1. Present value of $400 per year for 10 years at 10%
Method 1: Using excel: PV(10%,10,-400) = $ 2457.83
Method 2: Using PV table: 400 * lookup in PV table for 10 periods at 10% = 400 * 6.1446 = $2457.83
2. Future value of $400 per year for 10 years at 10%
Method 1: Using excel: FV(10%,10,-400) = $6,374.97
Method 2: Using PV table: 400 * lookup in FV table for 10 periods at 10% = 400 * 15.9374 = $6374.96
3. Present value of $200 per year for 5 years at 5%
Method 1: Using excel: PV(5%,5,-200) = $865.9
Method 2: Using PV table: 200 * lookup in PV table for 5 periods at 5% = 200 * 4.3295 = $865.9
4. Future value of $200 per year for 5 years at 5%
Method 1: Using excel: FV(5%,5,-200) = $1105.13
Method 2: Using FV table: 400 * 200 * lookup in FV table for 5 periods at 5% = 200 * 5.5256 = $1105.12
 
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