If you have a required rate of return of 12%, what would you be willing to pay for an annuity that will pay you $200/month for the next 5 years?
I need to see the calculation steps.
What you would be willing pay is the present value of annuity. The present value of annuity can be calculated using the ...
The solution explains how to determine the amount to be paid for an annuity given the required return.