What is the value today of $4,600 per year, at a discount rate of 10 percent, if
ID: 2612903 • Letter: W
Question
What is the value today of $4,600 per year, at a discount rate of 10 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
What is the value today of $4,600 per year, at a discount rate of 10 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Explanation / Answer
Value at Year 5 = pv(rate,nper,pmt,fv)
Value at Year 5 = pv(10%,15,4600,0)
Value at Year 5 = $ 34,987.96573
Value today = Value at Year 5 /(1+ discount rate)^5
Value today = 34987.96573/1.1^5
Value today = $ 21,724.77
Answer
Value today = $ 21,724.77
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