Question

In: Finance

Assume the appropriate discount rate is 7%. If the present value of this series of payments is $20,000, what must be the amount of each payment?

Today, you begin to receive payments of equal amounts at the beginning of each year for 6 years (including the payment you receive today). Assume the appropriate discount rate is 7%. If the present value of this series of payments is $20,000, what must be the amount of each payment?

Solutions

Expert Solution

Assume annual receipts as X, use PVAF (r%, n-1 years)

don't forget to take present value of year 1 as 1 since payments are received at beginning.

ans. is 3921.569(see the attached image below)

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Assume the appropriate discount rate is 7%. You will receive a payment every year for the...
Assume the appropriate discount rate is 7%. You will receive a payment every year for the next 14 years, which will grow at 3% annually. The amount of the first payment will be $5,000. What is the current value of this series of payments?
7. What is present value of perpetuity of $100 per year if appropriate discount rate is...
7. What is present value of perpetuity of $100 per year if appropriate discount rate is 5%? If discount rate is increased to 15% what is the present value of the perpetuity?
An investment will pay you $20,000 in 7 years. The appropriate discount rate is 9 percent...
An investment will pay you $20,000 in 7 years. The appropriate discount rate is 9 percent compounded daily. What is the present value? Multiple Choice $10,652.66 $10,972.24 $11,185.30 $10,120.03 $10,940.68
Assume the appropriate discount rate is 8%. What is the value 10years from today of...
Assume the appropriate discount rate is 8%. What is the value 10 years from today of an annuity that makes payments of $5,000 per year if the first payment is made 11 years from now and the last payment is made 18 years from now?
Assume the appropriate discount rate is 4%. You will receive a payment every year for the...
Assume the appropriate discount rate is 4%. You will receive a payment every year for the next 17 years, which will grow at 3% annually. The amount of the first payment will be $2,000. What is the current value of this series of payments?
Assume the appropriate discount rate is 5%. You will receive a payment every year for the...
Assume the appropriate discount rate is 5%. You will receive a payment every year for the next 16 years, which will grow at 4% annually. The amount of the first payment will be $3,000. What is the current value of this series of payments?
Assume the appropriate discount rate is 8%. You will receive a payment every year for the...
Assume the appropriate discount rate is 8%. You will receive a payment every year for the next 13 years, which will grow at 4% annually. The amount of the first payment will be $6,000. What is the current value of this series of payments?
Assume the appropriate discount rate is 8%. You will receive a payment every year for the...
Assume the appropriate discount rate is 8%. You will receive a payment every year for the next 13 years, which will grow at 4% annually. The amount of the first payment will be $6,000. What is the current value of this series of payments?
Assume the appropriate discount rate is 4%. You will receive a payment every year for the...
Assume the appropriate discount rate is 4%. You will receive a payment every year for the next 17 years, which will grow at 3% annually. The amount of the first payment will be $2,000. What is the current value of this series of payments?
What is the present value of an annuity due that makes 5 payments of $6,000 each if the interest rate is 7%?
What is the present value of an annuity due that makes 5 payments of $6,000 each if the interest rate is 7%?a. $20,323.27b. $24,601.18c. $26,323.27d. $28,001.22e. $28,599.24
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT