Suppose you are going to receive $24,000 per year for 7 years. The appropriate interest rate is 9 percent.
Required:
- What is the present value of the payments if they are in the form of an ordinary annuity?
- What is the present value if the payments are an annuity due?
- Suppose you plan to invest the payments for 7 years, what is the future value if the payments are an ordinary annuity?
- Suppose you plan to invest the payments for 7 years, what is the future value if the payments are an annuity due?
Note: Please show how you came up with the solution.