What is the value today of $2,000 per year, at a discount rate of 11 percent,...

Question

Question

Answer 1

Answer #1

Value of payments 8 years from now = Present value of ordinary annuity

= 2000*PVAF(11%, 19 years)

= 2000*7.8393

= $15,678.6

Value today = 15,678.6/(1.11)^8

= $6803.35

Hence, the answer is $6,803.35

Answer 2

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