In: Finance
What is the present value of the following annuity?
$759 every year at the end of the year for the next 6 years, discounted back to the present at 17.51 percent per year, compounded annually?
Present value of annuity | P×[1-(1÷(1+r)^n)]÷r | |
Here, | ||
A | Interest rate per annum | 17.51% |
B | Number of years | 6 |
C | Number of compoundings per per annum | 1 |
A÷C | Interest rate per period ( r) | 17.51% |
B×C | Number of periods (n) | 6 |
Payment per period (P) | $ 759 | |
Present value of annuity | $ 2,688.37 | |
759×(1-(1÷(1+17.51%)^6))÷17.51% |