What is the present value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15% interest rate?

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 to the problem

PV of an annuity is given by

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

C = Cash flow per period

i = interest raten = number of payments

Pv= 200*(1-(1+0.15)^-5)/0.15)

200*(1+0.497)/0.15

200*9.98

the present value will therefore be

= $1996

thanks.

Secure Information

Content will be erased after question is completed.

Enter the email address associated with your account, and we will email you a link to reset your password.

Forgot your password?

Sign Up