SOLUTION: What is the present value of annuity of R1500 payable at the end of each 6 months period for 2 years if money is worth 8% compounded semi annualy

Question 1077173: What is the present value of annuity of R1500 payable at the end of each 6 months period for 2 years if money is worth 8% compounded semi annualy
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
money is worth 8% per year compounded semi-annually.

1500 payment is made at the end of each semi-annual period or 2 years.

time period is semi-annually.

interest rate per time period is 8% / 2 = 4%.

number of time periods is 2 * 2 = 4.

you can use the following calculator to find the present value of an annuity with end of time period payments.

https://arachnoid.com/finance/

your inputs will look like this:

$$$

your output will look like this after you click on PV:

$$$

the manual formula you would use can be found in the following reference:

https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes

the formula you are looking for is titled:

PRESENT VALUE OF AN ANNUITY WITH END OF TIME PERIOD PAYMENTS

when you use the formula, you enter 4% as .04.

make sure you use all the parentheses exactly as shown in the formula.

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