# Calculating present value of annuity

What is the present value of the following annuities?

a. $2,500 a year for 10 years discounted back to the present at 7 percent

b. $70 a year for 3 years discounted back to the present at 3 percent

c. $280 a year for 7 years discounted back to the present at 6 percent

d. $500 a year for 10 years discounted back to the present at 10 percent

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#### Solution Preview

a. $2,500 a year for 10 years discounted back to the present at 7 percent.

C=periodic payment=$2500

n=number of period=10

i=discount rate per period=7%

Present Value (P)of an ordinary annuity is given ...

#### Solution Summary

Solution depicts the steps to find out the present value of given annuities.

$2.19