Homework Answers
Formula: The present value of an ordinary annuity (PV)
PV = C× [1-(1+r)^-n]/r
PV = Present value (The cummulative amount available at Present)
16,000
C= Periodic cash flow. (Weekly)
r =effective interest rate for the period. 0.1075÷52 =
0.0020673
n = number of periods. 52*7= 364
16,000 = C× [1-(1+0.0020673)^-364]/0.0020673
C= $62.5927
Answer is. $62.59
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