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07-06-2017
Business

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What is the present value of a $700 annuity payment over 6 years with a 10% interest rate?

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Aliwohaish12 Aliwohaish12

07-06-2017

Hi there
The formula of the present value of annuity ordinary is
Pv=pmt [(1-(1+r)^(-n))÷r]
Pv present value?
PMT 700 payment per year
R interest rate 0.1
N time 6 years
So
Pv=700×((1−(1+0.1)^(−6))÷(0.1))
pv=3,048.68

Hope it helps

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