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Unformatted text preview: Exercise #4 (Present value of an annuity) Payment Amount Interest Rate Number of Periods Present Value 250 $ 6% 5 625 $ 12% 32 8% 12 1,130.41 $ 4% 24 4,955.26 $ Bonus Problem: On January 1, 2004 you have won the lottery and will be paid $100,000 each year for 15 years starting on January 1, 2009 . (there are no payments in 20042008) What is the present value of this annuity on January 1, 2004? (assume a 7% interest rate) Creating a timeline will help Hint: First, draw the time line for the payments...
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 Fall '08
 Staff
 Accounting

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