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What is the present value of $1000 paid at the end of each of next 100 years if the interest rate is 7% per year?
What is the present value of $1000 paid at the end of each of next 100 years if the interest rate is 7% per year?
Expert Solution
Computation of the present value:-
Present value = Annual payment*((1-1/(1+rate)^n)/rate)
= $1,000*((1-1/(1+7%)^100)/7%)
= $1,000*14.26925
= $14,269.25
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