Homework question help needed

Accounting
Tutor: None Selected Time limit: 1 Day

3 years from now you will begin receiving annual payments of $7200. This will continue for 13 years. At a discount rate of 5.8%, what is the present value of this stream of cash flows?

Jun 24th, 2015

Thank you for the opportunity to help you with your question! Hi, He observes that work expands so as to fill the time available for its completion.

Hi,

Below is the solution

Pv of an annuity =C*(1-(1+i)^-n)/i)

Three years from now if you receive  $7200 

Time 13-3 =10 years 

int rate = 5.8%

Therefore 

we will have 

7200*(1-(1.058)^-10)/0.058)

7200*1-0.569/0.058

7200*7.431

present value of this stream of cash flows will be

= $53503.45



Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 24th, 2015

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