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Budgeting 12

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Budgeting 12

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
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  • February 3, 2022 at 6:38 pm #648061
    Avatarlaraib.abro
    Member
    • Topics: 11
    • Replies: 3
    • ☆

    Sir there is question in bpp kit what’s the pv of then annual payments of 700 the first paid immediately and discounted at 8% giving your answer to nearest

    Correct is 5073

    My answer coming 4690

    Bcz I did according to text and formula

    700 * 6.710 (AF)

    Why are they using 9 yr annuity and add 1

    February 4, 2022 at 7:48 am #648082
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    Annuity factors always apply to annuities that start in 1 years time.

    Here, there is also 700 payable immediately and the present value of 700 payable now is 700.

    (I do explain this in my free lectures on discounting).

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