In: Finance
A new toll lane is to be installed along interstate 10. Based upon current usage, you think the new lane will bring in about $857,144 per year for the next 8 years. If inflation will grow 1% per year, what is the present value of the income generated from the toll lane?
Round you answer to the nearest $1,000.
Present Value of Annuity
Where i = Inflation Rate
n = no of Years = 8
PMT = Annual Income = $857,144
PV = 857,144 * 7.6516
PV = 65,58,589.67 ~ 65,59,000
Ans : present value of the income generated from the toll lane 65,59,000