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What is the present value of 10 $10,000 payments each of which will be received at...

  1. What is the present value of 10 $10,000 payments each of which will be received at the

beginning of each period over 10 periods, discounted at 6% per a compounding period.

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Answer #1

These are annuity due since the annuities are received at the beginning of each period.

  • P = periodic payment = $10,000
  • r = rate per period = 6%
  • n = number of periods = 10

The first payment is received today, and hence it need not be discounted.

This can be better understood from the table below:

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