Question
Question :What is the present value of an investment that will provide eight equal payments of $6,000 to be received at the end of each
Question :What is the present value of an investment that will provide eight equal payments of $6,000 to be received at the end of each of eight consecutive years, assuming the first payment is not expected until four years from now (that is, at the end of year 3) and a time value of money of 10%?
I actually got $56,707.19 but that is not an answer choice in my MC. Did I read the question wrong? Please help me with where i went wrong.
My working notes below
Step 1
FV of Ordinary Annuity n=8 , I=10%
= 11.4359 * $6,000
= 68,615.4
Step 2
PV of $1 n=2 , I=10%
=.82645 * 68,615.4
=$56,707.1973
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started