Question
In: Finance
Assume the appropriate discount rate is 8%. What is the value 10 years 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?
Solutions
Expert Solution
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 = payment * (1 - (1 + r)^(-n))/r
= 5000 * (1 - (1.08)^(-8))/.08
= 5000 * (1 - .540269)/.08
= $28733.19
jeff jeffy answered 2 years agoRelated Solutions
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