Math Problem Statement
Find the present value of 20 annual payments of $1,500 per annum where the first payment is made 17 years from now. So there are 20 annual payments from t=17 to t=36 inclusive. The discount rate is 23% pa. The present value of these payments is:
Question 9 Select one:
a. $6,521.74
b. $6,518.66
c. $237.51
d. $233.84
e. $190.11
Solution
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Math Problem Analysis
Mathematical Concepts
Present Value of Annuity
Discounted Cash Flow
Formulas
Present Value of Annuity formula PV = P * (1 - (1 + r)^{-n}) / r
Theorems
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Suitable Grade Level
Advanced Finance
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