Saturday

December 20, 2014

December 20, 2014

Posted by **London** on Friday, October 23, 2009 at 6:22pm.

- finance -
**Reiny**, Friday, October 23, 2009 at 9:25pmThe assumption that the first payment is made 4 years from now should have been an essential part of the question, not an afterthought in brackets.

So three years from now there has to be sufficient money in the fund to provide interest of 2500 in one year.

P=I/(rt) = 2500/.0825 = $30,303.03

how much is that worth now ?

Present Value = 30303.03(1.0825)^-3

= $23,889.24

**Answer this Question**

**Related Questions**

FINANCE - A perpetuity with the first annual cash flow paid at the beginning of ...

calculating annuity - IF a company will generate 80,000 in annual revenue each ...

Finance - Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,...

Finance - If $12,000 is invested in a certain business at the start of the year...

Finance - 10. A new factory at Arcata requires an initial outlay of $3.5 million...

Finance - Your consulting firm will produce cash flows of $120,000 this year, ...

Finance - what is the present value of 1000 paid at the end of each of the next ...

Finance - what is the present value of $1,000 paid at the end of the next 100 ...

Business finance - Question No 1: Sumi Inc. has policy of paying a Rs. 9 per ...

Finance - The Garcia company's bond have a face value of 1000, will mature in 10...