Question

In: Finance

What is the present value of $1,400 a year at a discount rate of 8 percent...

What is the present value of $1,400 a year at a discount rate of 8 percent if the first payment is received 7 years from now and you receive a total of 25 annual payments?

Question 5 options:

$9,417.69

$9,238.87

$9,333.33

$9,420.12

$9,881.72

Solutions

Expert Solution

Calculate the present value of annuity at the end of year 6

PV at end of Year 6 = Annuity * ((1 - (1+R)^-N)/R

= 1400*((1-(1+0.08)^-25)/0.08

= 1400*10.674776

= 14944.69

Present value today = 14944.69/(1+8%)^6

= 9417.69

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

What is the present value of $2,100 a year at a discount rate of 8 percent...
What is the present value of $2,100 a year at a discount rate of 8 percent if the first payment is received 7 years from now and you receive a total of 23 annual payments?
What is the present value of $1,200 per year, at a discount rate of 8 percent,...
What is the present value of $1,200 per year, at a discount rate of 8 percent, if the first payment is received 9 years from now and the last payment is received 28 years from now?
What is the present value of RM2,400 a year at a discount rate of 8% if...
What is the present value of RM2,400 a year at a discount rate of 8% if the first payment is received 7years from now and you received a total of 25 annual payments?
a) What is the present value of $1,200 per year, at a discount rate of 8...
a) What is the present value of $1,200 per year, at a discount rate of 8 percent, if the first payment is received 9 years from now and the last payment is received 28 years from now? b) ABC Co. wants to sell you an annuity that will pay you $500 per quarter for 25 years. You want to earn a minimum rate of return of 5.1 percent. What is the most you are willing to pay today to buy...
What is the present value of $2,625 per year at a discount rate of 8%, if...
What is the present value of $2,625 per year at a discount rate of 8%, if the first payment is received six years from now and the last payment is received 20 years from now? PLEASE USE excel
What is the present value of $1,700 per year, at a discount rate of 10 percent,...
What is the present value of $1,700 per year, at a discount rate of 10 percent, if the first payment is received 4 years from now and the last payment is received 21 years from now? Multiple Choice $2,625.04 $10,475.13 $14,042.40 $10,265.63 $10,245.41
What is the value today of $1,800 per year, at a discount rate of 8 percent,...
What is the value today of $1,800 per year, at a discount rate of 8 percent, if the first payment is received 4 years from now and the last payment is received 25 years from today?
Given a discount rate of 13 ​percent, what is the present value of a perpetuity of...
Given a discount rate of 13 ​percent, what is the present value of a perpetuity of ​$1,400 per year if the first payment does not begin until the end of year​ 10?
What is the present value of a perpetuity of $80 per year if the discount rate...
What is the present value of a perpetuity of $80 per year if the discount rate is 11%?
Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity...
Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity of $100 per month if the first payment does not begin until the end of year five? Please give explanation and formula! Thanks!
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT