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An annuity can be defined as the difference between two perpetuities. calculate the present vale of...

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Finance

An annuity can be defined as the difference betweentwo perpetuities. calculate the present vale of an annuity thatpays $2,500 per year for 10 years using a dicount rate of 6%. showhow finding the difference between the two perpetuities produce thesame answer as using the annuity formula.

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Answer a PV of ordinary annuity PMT 1 1 1 Interest rate Number of Years Interest rate Given PMT 2500 Discount rate 6 Number of years 10 Present value 2500 1 1 1 6 10 6 1840022 Present    See Answer
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