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You will receive 21 annual payments of $30,500. The first payment will be received 5 years from today and the interest rate is 5.9 percent. What is the value of the payments today
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You will receive 21 annual payments of $30,500. The first payment will be received 5 years from today and the interest rate is 5.9 percent. What is the value of the payments today

User Cerealex
by
3.6k points

1 Answer

5 votes

Answer:

$287,696.63

Step-by-step explanation:

The computation of the value of the payments today is shown below:

Present value = Annuity × Present value of an annuity of 1

= $30,500 × 12.56362

= $3,83,190.36

Now

Present value = Value determined above ×Present value of 1

= $383,190.36 × 0.750793

= $287,696.63

User Thomas Frank
by
3.1k points
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