Beginning in five years, you will receive the 1st annual annuity payment of $7,000/yr. The payments...
Beginning in five years, you will receive the 1st annual annuity payment of $7,000/yr. The payments will continue through and include 2034. If your required return is 4%, find the value of annuity today.
Homework Answers
Using financial calculator
Input
PMT = -7000
N = 2034-2024 = 10
I/Y = 4
Solve for PV as
| $56,776.27 |
Value of annuity today = 56776.27/(1+4%)^5
= 46665.96
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