Question

Jerry is an extremely hard worker, so every year he earns a bonus of $10,000 at his job for his efforts. Over a career of 35 years, what is the present worth of all his bonuses from the point of view of the employer if the interest rate is 8%? Use an EXCEL function to determine the answer. Choose the closest answer you would get if you used an EXCEL function.

Answer 1

$116,545.68

Step-by-step explanation:

We have to find the Present value by applying the Present value formula that is shown on the excel attachment

Data provided in the question

Future value = $0

Rate of interest = 8%

NPER = 35 years

PMT = $10,000

The formula is shown below:

= -PV(Rate,NPER,PMT,FV,type)

So, after solving this, the present worth is $116,545.68