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What is the present value of a series of payments received each year for 11 years,...

What is the present value of a series of payments received each year for 11 years, starting with $300 paid one year from now and the payment growing in each subsequent year by 10%? Assume a discount rate of 12%. Please round your answer to the nearest cent.

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Answer #1

The correct answer is $ 2,696.96

Note :

Year Cash Flow Discounting Factor ( 12%) Present Value (Discounting Factor  * Cash Flow)
1 300 0.892857143 267.8571429
2 330 0.797193878 263.0739796
3 363 0.711780248 258.37623
4 399.3 0.635518078 253.7623687
5 439.23 0.567426856 249.2308978
6 483.153 0.506631121 244.7803461
7 531.4683 0.452349215 240.4092685
8 584.61513 0.403883228 236.1162458
9 643.076643 0.360610025 231.8998843
10 707.3843073 0.321973237 227.7588149
11 778.122738 0.287476104 223.6916932
2,696.96
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