aaroncx6744 aaroncx6744
  • 23-01-2020
  • Business
contestada

what's the present value of $850 annuity payments over five years if the interest rates are 9%?

Respuesta :

ijaz4308
ijaz4308 ijaz4308
  • 24-01-2020

Answer:

$3,306.20

Explanation:

The present value of any payments can be calculated using the following formula:

Present value=R((1-(1+i)^-n)/i)

R= annuity payment =$850 in this case

i=interest rate=9%

n=number of payments=5

Present value=$850((1-(1+9%)^-5)/9%)

                      =$3,306.20

                       

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