The concept of present value lets us know that the doggy estate worth in today's dollars is $180614.80
<h3>What is the present value of the doggy estate worth?</h3>
The concept of present value is significant because it enables investors to determine whether the amount they pay for an investment is reasonable. The present value of a future cash flow defines how much it is worth in today's value.
From the given information:
- The annual cashflow C = $20,000
- Interest rate (i) = 4.2% = 0.042
- Number of period (n) = 11
Thus, the present value of the doggy estate can be calculated by using the formula;
![\mathbf{PV = C \times \Big [ \dfrac{1 - \dfrac{1}{(1+i)^n}}{i}\Big] \times (1+i)}](https://tex.z-dn.net/?f=%5Cmathbf%7BPV%20%3D%20C%20%5Ctimes%20%5CBig%20%5B%20%5Cdfrac%7B1%20-%20%5Cdfrac%7B1%7D%7B%281%2Bi%29%5En%7D%7D%7Bi%7D%5CBig%5D%20%5Ctimes%20%281%2Bi%29%7D)
![\mathbf{PV = 20000 \times \Big [ \dfrac{1 - \dfrac{1}{(1+0.042)^{11}}}{0.042}\Big] \times (1+0.042)}](https://tex.z-dn.net/?f=%5Cmathbf%7BPV%20%3D%2020000%20%5Ctimes%20%5CBig%20%5B%20%5Cdfrac%7B1%20-%20%5Cdfrac%7B1%7D%7B%281%2B0.042%29%5E%7B11%7D%7D%7D%7B0.042%7D%5CBig%5D%20%5Ctimes%20%281%2B0.042%29%7D)
PV = $180614.80
Learn more about how to calculate the Present value here:
brainly.com/question/15904086