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3 years ago

Calculate the present value of annual payments of $3,000 per year for ten years at 8%.

Business

2 answers:

White raven [17]3 years ago

7 0

Answer:

The correct answer is: $1389,58.

Explanation:

The present value of money tells us how much a future sum of money is worth today given a certain rate of return. This is an important financial concept based in the principle that money received in the future is not worth as much as an equal sum received today. The present value of money formula is the following:

Present Value= FV/(1+r)^n

FV=Future Value
r=Rate of return
n=Number of periods

In the example,

Present value= ?
FV= $3000
r= 8% = 0,08
n= 10

Then,

Present Value= $3000/(1+0,08)^10
Present Value=$1389,58

So, $1389,58 is the present value of payments of $3000 per ten years at 8%.

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AlexFokin [52]3 years ago

6 0

Annual payments is $240

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Answer:

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