What is the PV of $1115 received at the end of each of the next 7 years? The discount rate is 6.3%.

The present value (PV) of an annuity can be calculated using the formula for the present value of a series of equal payments:

\[
PV = P \times \frac{1 - (1 + r)^{-n}}{r}
\]

Where:
- $ P $ = payment per period (\$1115)
- $ r $ = discount rate per period (6.3% or 0.063)
- $ n $ = number of periods (7 years)

Let's calculate the present value of this annuity.

\[
PV = 1115 \times \frac{1 - (1 + 0.063)^{-7}}{0.063}
\]

I will calculate this for you.The present value (PV) of receiving $1115 at the end of each of the next 7 years, with a discount rate of 6.3%, is approximately **$6158.53**.

Would you like more details or have any further questions?

Here are 5 related questions to explore:
1. How does the present value change if the discount rate increases?
2. What happens to the PV if payments continue for 10 years instead of 7?
3. How is the present value affected if payments are made at the beginning of each period instead of the end?
4. What is the future value of this series of payments after 7 years?
5. How does compounding frequency affect the present value?

**Tip:** Always remember that the present value of future cash flows decreases as the discount rate increases.

Learn how to calculate the present value of $1115 received at the end of each of the next 7 years using a 6.3% discount rate. This step-by-step guide covers the key formula for annuities and explores the time value of money. Suitable for high school and college students.

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