Please include with your response any necessary formula to solve this problem (on a regular calculator, NOT a financial calculator), along with a detailed explanation of how to solve the problem.
You are offered an annuity of $10,000 for 10 years starting four years from now. With interest rates at 5%, how much should you be willing to pay for this today?© BrainMass Inc. brainmass.com December 24, 2021, 4:58 pm ad1c9bdddf
We should calculate the present value of each payment of the annuity at the end of 4th year:
The formula is PV= Annuity/(1+r)^n
Where Annuity=10000, r= 5%, and n = ...
The solution answers the question(s) below.