What is the present value of $4000 per year annuity for 8 years at an interest...

Question

Question

What is the present value of $4000 per year annuity for 8 years at an interest rate of 6%(please round to nearest whole number)

Answer 1

Answer #1

Present Value Annuity = C*[{1-(1+i)^-n}/i]

C=Amount=$4000

i= Interest=6%

n=Numbers of payment= 8

PV annuity = 4000* [{1-(1+.06)^-8}/.06]

=4000*[{1-0.627} /0.06]

=4000* 6.2167

=$24,866.67 or $24,867

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Answer 2

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