Question

What is the present value of $4,900 per year at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 20 years from now?

Answer 1

Answer:

17640

Step-by-step explanation:

at a discount of 10% per year $4900 is equal to $490 per year

payment started 6 years ago from now and ended 20 years from now

therefore there is an accumulation of 26 years

for 26 years = 26 *$490= $12740

present value therefore = $4900+$12740=$ 17640