Question

. Find the accumulated present value of a continuous income stream that earns 4.2% interest annually, when $4000 is deposited per year for 30 years in the account.

Answer 1

The accumulated present value is $67,518.99.

Step-by-step explanation:

Investment opportunities that require a series of payments of a fixed amount for a specific number of periods are known as annuities.

The Present Value of this annuity can be calculated as :

Fv = $0

n = 30

r = 4.2 %

Pmt = - $4,000

P/ yr = 1

Pv = ?

Using a financial calculator, the Present Value (PV) of the annuity is $67,518.9948 or $67,518.99.