PV of Annuity(5 years from now) = Annuity * [{1 - (1 + r)-n} / r]
= $2,025 * [{1 - (1 + 0.07)-(23 - 5)} / 0.07]
= $2,025 * [0.7041 / 0.07]
= $2,025 * 10.0591 = $20,369.65
PV today = PV of Annuity(5 years from now) / (1 + r)n
= $20,369.65 / (1 + 0.07)5 = $20,369.65 / 1.4026 = $14,523.28
Questo 3. 0 Problem 5-49 Present Value and Multiple Cash Flows [LO 1 Value today What...
Problem 6-47 Present Value and Multiple Cash Flows [LO1] What is the value today of $4,700 per year, at a discount rate of 9 percent, if the first payment is received 5 years from today and the last payment is received 15 years from today? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
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