Question

What is the present value of 4360 to be received at the beginning of each of 30 periods discounted at 5% compound interest

Answer 1

The right solution is "70375.08".

Step-by-step explanation:

Given that,

Present value,

= 4360

Interest rate,

= 5%

Time period,

= 30

Now,

The present value of inflows will be:

=
`(1+rate)* (Present \ value[1-(1+Interest \ rate)^(-time \ period)])/(rate)`

=
`1.05* 4360* ([1-(1.05)^(-30)])/(0.05)`

=
`4360* 16.1410736`

=
`70375.08`