document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1114813>Question 1114813</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An investment will provide you with $100 at the end of each year for the next 10 years. What is the present value of that annuity if the discount rate is 8% annually?\r<BR>\n" );
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document.write( "What is the present value of the above if the payments are received at the beginning of each year?\r<BR>\n" );
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document.write( "If you deposit those payments ($100 at the end of each year) into an account earning 8%, what will the future value be in 10 years?\r<BR>\n" );
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document.write( "What will the future value (10 years) be if you open the account with $1,000 today, and then make the $100 deposits at the end of each year? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #729732 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=729732\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> you want an investment to provide you with 100 dollars at the end of each year for the next 10 years.\r<BR>\n" );
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document.write( "the annual discount rate is 8% per year.\r<BR>\n" );
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document.write( "you would have to invest $671.01 today in order for that to happen.\r<BR>\n" );
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document.write( "that's the present value of that investment.\r<BR>\n" );
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document.write( "the future value of that investment would be $1,448.66.\r<BR>\n" );
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document.write( "you want an investment to provide you with 100 dollars at the begining of each year for the next 10 years.\r<BR>\n" );
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document.write( "the annual discount rate is 8% per year.\r<BR>\n" );
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document.write( "you would have to invest $724.69 today in order for that to happen.\r<BR>\n" );
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document.write( "that's the present value of that investment.\r<BR>\n" );
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document.write( "the future value of that investment would be $1,564.55.\r<BR>\n" );
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document.write( "to understand what's happening, you might want to look at the cash flows.\r<BR>\n" );
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document.write( "here they are side by side.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041501.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "the remaining balance in both accounts has to be 0 at the end of the 10 year period.\r<BR>\n" );
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document.write( "if you look at the 100 deposits as a cash flow, then you can calculate the present value of those cash flows at 8% per year and the future value of those cash flows at 8% per year.\r<BR>\n" );
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document.write( "those figures are shown in the excel printout.\r<BR>\n" );
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document.write( "there are formulas that allow you to find the present value of the cash flows and the future value of the cash flows.\r<BR>\n" );
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document.write( "those formulas are in the reference below:\r<BR>\n" );
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document.write( "<a  rel=nofollow HREF= \"https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes\" target = \"_blank\">https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes</a>\r<BR>\n" );
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document.write( "the formulas you would be looking for are:\r<BR>\n" );
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document.write( "FUTURE VALUE OF AN ANNUITY WITH END OF TIME PERIOD PAYMENTS<BR>\n" );
document.write( "FUTURE VALUE OF AN ANNUITY WITH BEGINNING OF TIME PERIOD PAYMENTS<BR>\n" );
document.write( "PRESENT VALUE OF AN ANNUITY WITH END OF TIME PERIOD PAYMENTS<BR>\n" );
document.write( "PRESENT VALUE OF AN ANNUITY WITH BEGINNING OF TIME PERIOD PAYMENTS\r<BR>\n" );
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document.write( "just follow the directions and you should be able to duplicate the figures i've given you.\r<BR>\n" );
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document.write( "if you have a problem duplicating these results using the formulas, let me know and i'll help you through them.\r<BR>\n" );
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document.write( "be sure to use the parentheses exactly as shown.<BR>\n" );
document.write( "it's too easy to mess up if you don't.\r<BR>\n" );
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document.write( "there is also an online calculator that is referenced in that tutorial that allows you to calculate the present value and the future value of the annuity.\r<BR>\n" );
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document.write( "annuity is just as fancy word for regular payments.\r<BR>\n" );
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document.write( "that calculator can be found at <a  rel=nofollow HREF= \"https://arachnoid.com/finance/\" target = \"_blank\">https://arachnoid.com/finance/</a>\r<BR>\n" );
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document.write( "i used that online calculator to get you the results shown below:\r<BR>\n" );
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document.write( "inputs for end of time period payments are shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041502.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "inputs for beginning of time period payments are shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041503.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "output for present value of end of time period payments is shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041504.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "output for future value of end of time period payments is shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041505.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "output for present value of beginning of time period payments is shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041506.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "output for future value of beginning of time period payments is shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041507.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "if you have any further questions regrding this, just let me know.\r<BR>\n" );
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