Question

Use Excel to compute the present value of 10 equal payments of $16,800, with an interest rate of 12 percent. (Round "Present Value" to nearest whole dollar amount.)

Excel Function: Present Value Annuity of $1
Annuity Payments:
n= 10
i = 12 %
Present Value: ________

Answer 1

To compute the present value of 10 equal payments of $16,800 with an interest rate of 12 percent in Excel, you can use the Present Value function. The present value is approximately $102,514.

Step-by-step explanation:

To compute the present value of 10 equal payments of $16,800 with an interest rate of 12 percent in Excel, you can use the Present Value function. The formula for calculating the present value of an annuity is: PV = PMT * (1 - (1 + r)^(-n)) / r, where PV is the present value, PMT is the annuity payment, r is the interest rate, and n is the number of periods. In this case, the annuity payment is $16,800, the interest rate is 12 percent (or 0.12), and the number of periods is 10. Plugging these values into the formula, the present value is approximately $102,514.