Question

John Smith will receive annual payments of $800 at the end of each year for 12...

John Smith will receive annual payments of $800 at the end of each year for 12 years. The first payment will be received in year 4. What is the present value of these payments if the discount rate is 7 percent?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

present value of all payments=sum of all discounted inflows at 7%

Present value of inflow=Inflow/(1+discount rate)^number of years

Hence presnt value of all inflows=$4254.70

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You will receive annual payments of $5,000 at the end of each year for 10 years,...
You will receive annual payments of $5,000 at the end of each year for 10 years, but the first payment will be received in year 3. What is the present value of these payments if the discount rate is 8 percent? $30,260.49 $26,633.40 $28,251.12 $24,387.13
You will receive annual payments of $5,000 at the end of each year for 10 years,...
You will receive annual payments of $5,000 at the end of each year for 10 years, but the first payment will be received in year 3. What is the present value of these payments if the discount rate is 6 percent? $30,898.36 $24,387.13 $26,260.49 $28,251.12
You will receive annual payments of $5,000 at the end of each year for 10 years,...
You will receive annual payments of $5,000 at the end of each year for 10 years, but the first payment will be received in year 3. What is the present value of these payments if the discount rate is 6 percent? $30,898.36 $24,387.13 $26,260.49 $28,251.12
You are scheduled to receive annual payments of $4,000 for each of the next 8 years....
You are scheduled to receive annual payments of $4,000 for each of the next 8 years. The discount rate is 8 percent What is the theoretical relation between the present value if you receive these payments at the beginning of each year and the present value if you receive these payments at the end of each year? (Write the equation)
You are scheduled to receive annual payments of $21,400 for each of the next 23 years....
You are scheduled to receive annual payments of $21,400 for each of the next 23 years. Your discount rate is 8 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?
Lester’s Meats just settled a law suit and will receive 5 annual payments as a settlement....
Lester’s Meats just settled a law suit and will receive 5 annual payments as a settlement. The first payment will be received one year from today in the amount of $134,000. Each annual payment will be 7 percent larger than the previous year’s payment. What is the present value of this settlement at a discount rate of 8.8 percent? How do i type this into a BA 11 Plus calc?
You are scheduled to receive annual payments of $9,400 for each of the next 27 years....
You are scheduled to receive annual payments of $9,400 for each of the next 27 years. The discount rate is 7.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?   $9,400.00 $7,887.25 $8,288.63 $9,001.91 $10,058.00
6. Robert is repaying a debt with 19 annual end-of-the-year payments of $800 each. At the...
6. Robert is repaying a debt with 19 annual end-of-the-year payments of $800 each. At the end of the 4th year, he makes an extra payment of $1600. He then refinances his loan by reducing his remaining payment period by 2 years and making level payments over the remaining time. If the effective rate of interest is 8.9%, what is the amount of his new annual payment? Answer = $
Assume you are to receive a 20-year annuity with annual payments of $60. The first payment...
Assume you are to receive a 20-year annuity with annual payments of $60. The first payment will be received at the end of Year 1, and the last payment will be received at the end of Year 20. You will invest each payment in an account that pays 10 percent. What will be the value in your account at the end of Year 30?(FV twice) $6,854.81 $7,427.83 $8,709.88 $9,427.83
What is the present value of $2,000 a year at a discount rate of 8 percent...
What is the present value of $2,000 a year at a discount rate of 8 percent if the first payment is received 4 years from now and you receive a total of 20 annual payments?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT