Question

What is the present worth of a P100 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 8%?

Answer 1

The present value is:

$PV= \frac{FV}{(1+{r})^n}$

$PV= \frac{100}{(1+{8\%})^3}+ \frac{100}{(1+{8\%})^4}$

$PV=P153$