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    Present Value of an Annuity Computation

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    Jean will receive $8,500 per year for the next 15 years from her trust. If a 7% interest rate is applied, what is the current value of the future payments? Describe how you solved this problem, including which table (for example, present value and future value) was used and why.

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    The $8,500 a year which Jean will receive for 15 years at 7 percent interest is an annuity. An annuity is a stream of periodic payments. I am assuming that Jean will receive the money at the end of each year. The ...

    Solution Summary

    The solution discusses what is the current value of the future payments.