Answer to Question #114910 in Finance for rita dargham

Question

What is the value today of $3,100 per year, at a discount rate of 9 percent, if the first payment is received 5 years from today and the last payment is received 15 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

$PV=FV/(1+i)^n$

i-discount rate

n-year

PV-present value

FV-future value

$PV=\frac{3100}{(1+0.09)^5}+\frac{3100}{1.09^6}+\frac{3100}{1.09^7}+\frac{3100}{1.09 ^8}+\frac{3100}{1.09^9}+\frac{3100}{1.09^{10}}+\frac{3100}{1.09^{11}}+\frac{3100}{1.09^{12}}+\frac{3100}{1.09^{13}}+\frac{3100}{1.09^{14}}+\frac{3100}{1.09^{15}}=14,945$