Answer:
PV=$237,228.84
Step-by-step explanation:
Giving the following information:
Annual payment= $25,000
Number of periods= 15 years
Interest rate= 7.5%
To calculate the value of the payments today (PV), we need to use the following formula:
PV= A*{(1/i) - 1/[i*(1 + i)^n]} * (1+i)
PV= 25,000*{(1/0.075) - 1/ [0.075*(1.075^15)]} * 1.075
PV=$237,228.84