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27 December, 11:37

What is the present value of $1,400 a year at a discount rate of 8 percent if the first payment is received 7 years from now and you receive a total of 23 annual payments

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  1. 27 December, 14:17
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    P V = 1669,5

    Explanation:

    After seven years, future payment will be 9800$ and from there on we will have 23 annual payments more:

    P V = 9800 / (1+0.08) ^23 = 9800/5,87 = 1669,5
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