What is the value today of $1,200 per year, at a discount rate of 8 percent, if the first payment is received 6 years from now and the last payment is received 29 years from today?
A. 8598.84
B.8426.86
C. 2795.65
D. 8470.04
E. 12734.51
Present value=Cash flows*Present value of discounting factor(rate%,time period)
=1200/1.08^6+1200/1.08^7+..............+1200/1.08^29
=1200[1/1.08^6+1/1.08^7+................+1/1.08^29]
=1200*7.165695973
which is equal to
=$8598.84(Approx).
What is the value today of $1,200 per year, at a discount rate of 8 percent,...