Help!! Anyone!! 6. Present value of annuities You won a lottery that will make e

Question

Help!! Anyone!!

6. Present value of annuities You won a lottery that will make equal payments of $3,000 at the end of each year for the next eight years. If the annual interest rate stays constant at 4%, what is the value of these payments in today's dollars? Round your answer to the nearest whole dollar. O $21,006 O $17,168 O $20,198 O $25,248 You found out that now you are going to receive payments of $7,000 for the next 14 years. You will receive these payments at the beginning of each year. The annual interest rate will remain constant at 14%. What is the present value of these payments? Round your answer to the nearest whole dollar. O $42,015 O $64,661 O $38,318 O $47,897

Explanation / Answer

6. Payment = 3000

number of years = 8

discount @4%

Present value of annuity @4% at 8 years = 6.7327

= 3000 * 6.7327 = 20198

Payment = 7000

number of years = 14

discount@14%

Present value of annuity @14% at 14 years = 6.0021

= 7000 * 6.0021 = 42015

2.

  

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