Non-matched periods/PV Question

[Fred9104]

Wonder if anyone could help me with an approach here. Looking at an investment that pays $300 at the end of every 6 months for the next 5 years. APR is 16%, but it is compounded quarterly though. Looking to find PV. Not sure how to attack this one, since the compound periods and payment periods differ.

Any advice would be greatly appreciated.

Fred

 

[stapel]

Wonder if anyone could help me with an approach here. Looking at an investment that pays $300 at the end of every 6 months for the next 5 years. APR is 16%, but it is compounded quarterly though. Looking to find PV. Not sure how to attack this one, since the compound periods and payment periods differ.

What formulas, methods, algorithms, etc, have they given you for related tasks? What have you tried so far?

Thank you!

 

[Fred9104]

My approach was going to be:

N = 5yr x 4 = 20, I = 8/4 periods for quarterly = 2, PMT = 300/2 = -150, FV = 0

PV = 2,4527.15

However, I'm not sure if I can divide the PMT up like that and it work?

Fred

 

[Fred9104]

Inom = 16%

1. (1 + .16/4)^4 -1 = .1698586 (16.998586%)

2. (1 + i/2)^2 -1 = .1698586

= 1.1698586
1 + i/2 = 1.2698686^0.5

=1.08160

i/2 = 0.08160
i = 0.16320 (16.32)

Would I then go...

N = 10 I = 16.32/2 = 8.16 PMT = 300 FV = 0

PV = 1,998.57

 

[Fred9104]

Inom = 16%

1. (1-0.16/4)^4 -1= 0.16986 (16.986%)

2. (1-i/2)^2 -1 = 0.16986

(1-i/2)^2 = 1.16986
1-i/2= 1.16986^0.5
=1.08160
i/2 = 0.08160
i = 0.16320 (16.32%)

Would I then go this route....

N=10, I = 16.32/2 =8.16, PMT = 300, FV = 0

PV = 1998.58

 

[Fred9104]

Thanks Dennis! I knew I had to be missing something simple! Any chance that you can take a look at my other question on the forum related to uneven cash flows and FV. I had an approach, but I'm not sure if it is correct.