Question

An annuity pays $10 per year for 98 years. What is the present value (PV) of this annuity given that the discount rate is 7%?

Answer 1

Answer:

It is $142.7

Explanation:

Annuity df = ( 1-(1+r)^-n)/r

Annuity df @7% for 98 years =14.27

Pv of payment for 98 yrs =14.27 ×$10

=$142.7