Question:
Prepare a time diagram for the present value of a four-year ordinary annuity of $200. Assume an interest
rate of 10% per year.
Answer:
Present
Value
?
0 Year 1 Year 2 Year 3 Year 4
___________________________________________
$200 $200 $200 $200
n = 4, i = 10%
Prepare a time diagram for the present value of a four-year ordinary annuity of $200. Assume an interest
rate of 10% per year.
Answer:
Present
Value
?
0 Year 1 Year 2 Year 3 Year 4
___________________________________________
$200 $200 $200 $200
n = 4, i = 10%
