Exercise Algo Present value; ordinary annuity LO
Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment
options:
Pay $ today for the car.
Pay $ at the end of each quarter for three years.
Required:
a Assuming Denzel uses a discount rate of or quarterly calculate the present value.
b Which option gives him the lower cost?
Complete this question by entering your answers in the tabs below.
Req B
Assuming Denzel uses a discount rate of or quarterly calculate the present
value.
Note: Use tables, Excel, or a financial calculator. Round your answers to decimal places.
FV of $ PV of $ FVA of $ and PVA of $
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