Lecture Notes on Time Value of Money

Problem. What is the present value of an annuity due of five $800 annual payments discounted at 10%? 800 x (1.10)xPVIVA10%,5 = 800 x(1.10)x 3.79079 x = 800 x 4.16987 = $3,335.9. Note: Financial calculators have a BEGIN and END mode. The above assumes the END mode. If the calculator is set in the BEGIN mode, it calculates an annuity due. ................
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