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What is the value today of $4,400 per year, at a discount rate of 8.3 percent,...

What is the value today of $4,400 per year, at a discount rate of 8.3 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today

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Answer #1

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=4400/1.083^6+4400/1.083^7+4400/1.083^8+.............+4400/1.083^20

=4400[1/1.083^6+1/1.083^7+1/1.083^8+.............+1/1.083^20]

=$(4400*5.641438266)

which is equal to

=$24822.33(Approx).

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