Present Value of S1 8% 10.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.
ID: 2545105 • Letter: P
Question
Present Value of S1 8% 10.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.8930.8770.8700.862 0.847 0.833 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.79707690.7560.743 0.718 0.694 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.7940.772 0.7510.7120.6750.6580.640.609 0.579 4 0.961 0.924 0.888 0.855 0.823 0.792 0763 0.735 0.708 0.683 0.6360.592 0.5720.552 0.516 0.482 50.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.6210.56705190497 0476 0.4370.402 6 0.942 0.888 0.837 0.790 0746 0.705 0.666 0.630 0.596 0.5640.50704560.432 0410 0.370 0335 7 0.933 0871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 045204000.3760.354 0.314 0.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 046704040.350.3270.305 0.266 0.233 9 0.914 0.837 0.766 0.703 0645 0.592 0.5440.500 0.460 0.424 03610.3080.284 0.263 0.2250.194 10 0.905 0820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.27002470.2270 0.162 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.2870.2370.2150.195 0.1620.135 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.2570.2080.1870.168037 0.112 13 0.879 0773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.2290.1820.1630.145 0.116 0.093 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.2050.160 0.1410.125 0.0990.078 Periods | 1% 2% 3% 4% 5% 6% 9% | 10% | 12% | 14% | 15% | 16% | 18% | 20% 0 9Explanation / Answer
Requirement 1 :
With 12% interest rate, Sarah needs $
Present value of annuity at 12% for 6 years = Annuity x PVA 12%, 6 years = $ 31,000 x 4.111 = $ 127,441.
Requirement 2:
With 6% interest rate, Sarah needs $
Present value of annuity at 6% for 6 years = $ 31,000 x 4.917 = $ 152,427.
127,441