Re: Annuity every other year Q plz help
The setup is that you have a 5period, 5payment annuity. First payment is at the end of the first (2year) period; hence, you'll wanna use the shortcut formula for an "ordinary" annuity.
The only wrinkle is that you'll need to first determine the perperiod rate. For this, think of it as being the twoyear rate which would make someone indifferent between investing a dollar for two years at this twoyear rate, vs. investing that same dollar for two consecutive oneyear periods.
If the oneyear rate is r, someone investing for two consecutive years would end up with (1 + r)^2 dollars at maturity. Hence, they'd be just as happy to get into a 2year deal which offered a oneperiod (2year) rate of (1 + r)^2  1.
Take it from here?
