Answered

Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Join our platform to connect with experts ready to provide precise answers to your questions in various areas. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

An investment offers $5,200 per year, with the first payment occurring one year from now. The required return is 7 percent. a. What would the value be today if the payments occurred for 20 years

Sagot :

Answer:

the present value of an annuity is $55,088.87

Explanation:

The computation of the value today is given below:

Present value of annuity is

= Annuity × [1 - (1+interest rate)^-time period] ÷ rate

= $5,200 × [1 - (1.07)^-20] ÷ 0.07

= $5,200 × 10.59401425

= $55,088.87

hence, the present value of an annuity is $55,088.87

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.