Ask Question
17 August, 06:27

What is the value today of $4,400 per year, at a discount rate of 8.3 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today

+3
Answers (1)
  1. 17 August, 10:26
    0
    Present Value = $290.20

    Explanation:

    The present value of a future payment can be calculated with the following formula:

    PV = FV / (1 + i) N

    Where i is the annual interest rate or discount rate, and t is the number of years until the payment will be received.

    PV = Present Value = ?

    FV = Payment = $4,400

    i = 8.3% = 0.083

    N = 20 - 6 = 14

    PV = $4400 / (1 + 0.083) (20 - 6)

    PV = $4400 / (1.083 * 14)

    PV = $4400 / 15.162

    PV = $290.1992

    Present Value = $290.20 (Approximated)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What is the value today of $4,400 per year, at a discount rate of 8.3 percent, if the first payment is received 6 years from today and the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers