Answer:
The value of the payment today is $ 55,447.61
Explanation:
A series of equal periodic payments or receipts made for certain number of period is known as annuity.
<em>To determine the worth of such cash flows, we discount the cash flows at a the given interest rate using the formula below:</em>
PV = (1 -(1+r)^(-n))/ r × Cash flows
<em>r - rate per period, n - number of periods, PV - present value</em>
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<em>Value of the payments today:</em>
r = 6.4%/2 = 3.2%
n = 9 × 2 = 18 , ( there are 2 six months in a year)
PV = (1 - (1.032)^(-18))/0.032) × 4,100
PV = 13.5238 × 4,100
PV = $ 55,447.61
The value of the payment today is $ 55,447.61