# Q#19 in Qbank Quant

an investor wants to receive \$10000 annually for 10 years with the first payment 5 years from today. if the investor can earn a 14% annual return how much does she have to invest today - please help!!! simple question… new to this calculator. whats the answer and how do i work it out on the BAII plus??

solve for pv of a 5 year annuity, then discount thatby 5 years

possible answers 27091 30884 52161 not getting it

solve for pv of 10 year annuity (52,161), then discount by 4 years since payments start at the beginning of year 5. Is the answer 30,884?

27091 I/Y = 14, PMT = 10000, FV = 0, CPT PV = 52161.16 I/Y =14, PMT = 0, FV = 52161.16, CPT PV = 27090.87

oh you are right, payments begin in 5 years, so the first part is annuity due, answer is 30884

My guess is that she’s using her calculator in end mode and using n=10 for the first step of the question and n=5 for the second. She could leave it in end mode if she discounts the future value in the second part by four, but I usually change my calculator over whenever I see the word ‘begin’ and I used 5 in the second step to get to 30,884.

how do u change the calc from beg to end mode? i thought it would have been 27091. is it 30884? i’m now learning the calc… thnx though