Question
Barbara Jones just learned that she received an inheritance from her grandmother. The inheritance provides for Barbara to receive $4300 per year at the end
Barbara Jones just learned that she received an inheritance from her grandmother. The inheritance provides for Barbara to receive $4300 per year at the end of the year for each of the next 4 years. Assuming a discount rate of 8%, what is the value of this inheritance to Barbara today?
| Type of Cash Flow | Periods | Interest Rate | Factor |
|---|---|---|---|
| PV of $1 | 4 | 8% | 0.7350 |
| FV of $1 | 4 | 8% | 1.3605 |
| PV ordinary annuity | 4 | 8% | 3.3121 |
| FV ordinary annuity | 4 | 8% | 4.5061 |
| PV annuity due | 4 | 8% | 3.5771 |
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Creating Financial Value A Guide For Senior Executives With No Finance Background
Authors: Malcolm Allitt
1st Edition
1472922719, 978-1472922717
