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Home / Questions / iNCLUDE TABLE PLEASE AND ALL FORMULAS USED. His recently departed dear Aunt Annie, may sh

iNCLUDE TABLE PLEASE AND ALL FORMULAS USED. His recently departed dear Aunt Annie, may sh

iNCLUDE TABLE PLEASE AND ALL FORMULAS USED.

His recently departed dear Aunt Annie, may she rest in peace,has left Tom a 6-year annuity paying $4,500 per year. He willreceive the first payment 4 years from today. If he is discountingat 7% (EAR), what is the present value of his inheritance?

***** I know that for the first 4 years he will not be receivinganything. His payments will start during the 5th year.

5      ------ 4500/(1.07)^5?

6    -------- 4500/(1.07)^6

7

8

9

10

this is the total of the 6 annuity payments, is thiscorrect?

Dec 04 2019 View more View Less

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