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Severs on has an annuity due that pays $400 per year for 20 years. What is the value of the cash flow 20 years from today if they are placed in an account that earns 7.50%
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Severs on has an annuity due that pays $400 per year for 20 years. What is the value of the cash flow 20 years from today if they are placed in an account that earns 7.50%

User Gregory Mostizky
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1 Answer

7 votes
400e^(0.075)(20)
400e^(1.5)
400(4.48168)
=1,792.67562
Or 1,792.68 rounded to the nearest cent
User Keramat
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9.1k points
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