Question

C e lery they to the w w w of at begins in need is $120. Using and of 5%. determine the present Value of this prize on for 10 consecutive years with one was the payment and of you and only in this year) is not 586 but instead o ra coma Forum Pace your o wn dollars and cons without using ad four decimales of acouracy it your answer one hundred thousand five hundred and even the place your answer as 100670. Work ail analysis using at least SUBMIT ANDER

Answer 1

present value of prize = sum of present values of each payment

present value of each payment = payment amount / (1 + interest rate)ⁿ,

where n = number of years after which the payment is received

present value of prize = $701.21

A B PV of Year Payment Payment 1 $ 86.00 $ 81.90 2 $ 86.00 $ 78.00 3 $ 129.00 $ 111.44 4 $ 86.00 $ 70.75 5 $ 86.00 $ 67.38 6 $ 86.00 $ 64.17 7 $ 86.00 $ 61.12 8 $ 86.00 $ 58.21 9 $ 86.00 $ 55.44 10 $ 86.00 $ 52.80 Total $ 701.21

86 1 Year Payment 2 1 32 4 3 129 86 86 86 76 86 PV of Payment =B2/(1+5%)^A2 =B3/(1+5%)*A3 =B4/(1+5%)^A4 =B5/(1+5%)^A5 =B6/(1+5%)^A6 =B7/(1+5%)^A7 =B8/(1+5%)^A8 =B9/(1+5%)^49 =B10/(1+5%)^A10 =B11/(1+5%)^A11 -SUM(C2:011) 86 86 86 98 10 9 11 10 12 86 Total