Suppose you are going to receive $ 42,000 per year for 18 years at the beginning...
Suppose you are going to receive $ 42,000 per year for 18 years at the beginning of each year. Compute the present value of the cash flows if the appropriate interest rate is 14 percent. Round it two decimal places, and do not include the $ sign, e.g., 123456.7
Homework Answers
Present value of annuity due=(1+rate)*Annuity[1-(1+interest rate)^-time period]/rate
=1.14*42,000[1-(1.14)^-18]/0.14
=42,000*7.37285932
=309660.09(Approx).
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