| we have to compute the present value of Perpetuity | |||
| Annual payment = | $ 2,036.00 | ||
| Discount rate = | 9% | ||
| Present value at 6th year = Annual payment / discount rate | |||
| Present value = 2036/9% | $ 22,622.22 | ||
| Present value today = | FV/(1+r)^t | ||
| FV= | $ 22,622.22 | ||
| r= | 9% | ||
| t= | 6 | ||
| Present value = | $ 13,488.89 | ||
| 22622.22/(1+9%)^6 | |||
| Answer = | $ 13,488.89 | ||
Get Answers For Free
Most questions answered within 1 hours.