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Mrs. Crawford will receive $8,600 a year for the next 16 years from her trust. Use...

Mrs. Crawford will receive $8,600 a year for the next 16 years from her trust. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

If a 14 percent interest rate is applied, what is the current value of the future payments? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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Answer #1

Answer:

Given

Per Month receipt A=$8600

Period N=16 years

Interest rate r=14%

Current value PV=A*(1-(1+r)^-N)/r

PV=8600*(1-(1+14%)^-16)/14%

PV=$53,879.51

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