You will receive annual payments of $15,000 for the next 25 years. You would like to...

You will receive annual payments of $15,000 for the next 25 years. You would like to have your money today instead of waiting of waiting 25 years to receive it all. What is the equivalent value of this future stream of payments if the appropriate discount rate is 8%?

A. 148,421.91

B. 160,121.64

C. 183,926.48

D. 201,448.72

Solutions

Expert Solution

Annual payments = $15,000

Received for 25 years

Discount rate = 8%

Present value of annual payments is

= $15,000 * PVAF(8% , 25 years)

= $15,000 * 10.674776

= $160,121.64

jeff jeffy answered 1 day ago

Next > < Previous

Related Solutions

You are scheduled to receive annual payments of $8,500 for each of the next 21 years....

You are scheduled to receive annual payments of $8,500 for each of the next 21 years. The discount rate is 8.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?

You are scheduled to receive annual payments of $9,600 for each of the next 24 years....

You are scheduled to receive annual payments of $9,600 for each of the next 24 years. The discount rate is 8.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year? $9,600.00 $10,368.00 $8,554.57 $9,279.36 $8,086.09

You are scheduled to receive annual payments of $3,600 for each of the next 12 years...

You are scheduled to receive annual payments of $3,600 for each of the next 12 years (you are going to receive the payments at the end of each year). The discount rate is 10 percent. What is the present value of these cash flows? Round the answer to two decimal places.

You are scheduled to receive annual payments of $8,700 for each of the next 23 years....

You are scheduled to receive annual payments of $8,700 for each of the next 23 years. The discount rate is 8.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year? a. $7,642.82 b. $8,409.42 c. $9,396.00 d. $8,700.00 e. $7,218.26

For the next 30 years, you will receive annual payments of $10,000/year. The difference in the...

For the next 30 years, you will receive annual payments of $10,000/year. The difference in the present value terms if you receive these payments at the beginning of each year rather than at the end of each year is closest to what value? Assume the discount rate is 6% APR 8150 8300 7850 8000 8450

You are scheduled to receive annual payments of $8,600 for each of the next 27 years....

You are scheduled to receive annual payments of $8,600 for each of the next 27 years. The discount rate is 7.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?

8. You are scheduled to receive annual payments of $60,000 for each of the next 20...

8. You are scheduled to receive annual payments of $60,000 for each of the next 20 years. The annual rate of return is 8 percent. What is the difference in the future value in year 20 if you receive these payments at the beginning of each year rather than at the end of each year? 9. You make the following deposits for the next five years into an investment account. All deposits are made at the end of the year...

Janice plans to retire in 25 years and would like to receive $5000.00 per month for...

Janice plans to retire in 25 years and would like to receive $5000.00 per month for fifteen years starting at the end of the first month after her retirement. Calculate the amount she must invest now if interest is 7.5% compounded monthly.

Assume that you borrow $15,000 for five years (annual payments) at a market rate of 5%....

Assume that you borrow $15,000 for five years (annual payments) at a market rate of 5%. Assuming that inflation is 3.5%, what would the equivalent equal annual payment be in constant dollars?

1. Suppose that you will receive annual payments of $27,400 for a period of 20 years....

1. Suppose that you will receive annual payments of $27,400 for a period of 20 years. The first payment will be made 6 years from now. If the interest rate is 8.00%, what is the value of the annuity in year 5, what is the current value of this stream of cash flows? (Do not round intermediate calculations. Round your answer to 2 decimal places.) a) Value of security in year 5? b) Value of security today? 2. The...

Subjects