Find the present value of $200 payment at the beginning of each year for 5 years...

Question

Question

Find the present value of $200 payment at the beginning of each year for 5 years at 5%.

A)

928.31

B)

899.78

C)

921.38

D)

909.19

**using financial calculator**

business finance

Answer 1

Answer #1

Calculating the Present value:-

200 200 200 200 = 200 + (1 + 0.05)+ (1 +0.05)2 + (1 +0.05)3 + (1+0.05).

= 200 +190.4762 + 181.4059 + 172.7675 + 164.5405

= 909.19

Since, first $ 200 is received now at zero period it will be 200 & other $ 200 payment's Present Value is calculated.

Answer 2

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