Question

You found out that now you are going to recieve payments of $10,000 for the next 14 years. You will recieve these payments at the BEGINNING of each year. The annual interest rate will remain constant at 16%. What is the present value of these payments?

Answer 1

Year	(a)	(b)		(c) = (a)*(b)
	Amount	Discounting Factors		Discounted Amount
1	10000	1/1.16^0	1	10000
2	10000	1/1.16^1	0.862069	8620.6897
3	10000	1/1.16^2	0.743163	7431.6290
4	10000	1/1.16^3	0.640658	6406.5767
5	10000	1/1.16^4	0.552291	5522.9110
6	10000	1/1.16^5	0.476113	4761.1302
7	10000	1/1.16^6	0.410442	4104.4225
8	10000	1/1.16^7	0.35383	3538.2953
9	10000	1/1.16^8	0.305025	3050.2546
10	10000	1/1.16^9	0.262953	2629.5298
11	10000	1/1.16^10	0.226684	2266.8360
12	10000	1/1.16^11	0.195417	1954.1690
13	10000	1/1.16^12	0.168463	1684.6284
14	10000	1/1.16^13	0.145227	1452.2659
Present value of the payments				63423.3381