How much would you have to invest today to receive the following? Use Appendix B

Question

How much would you have to invest today to receive the following? Use Appendix B or Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.c. $6,700 each year for 17 years at 15 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

c. $6,700 each year for 17 years at 15 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

d. $44,000 each year for 40 years at 9 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

Explanation / Answer

Present value of inflows=Cash inflows*Present value of annuity factor(rate,time period)

1.Present value=$6700*Present value of annuity factor(15%,17)

=$6700*6.05(Approx)

=$40515.98(Approx)

2.Present value=$44000*Present value of annuity factor(9%,40)

=$44000*10.76(Approx)

=473323.85(Approx).

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