Valuation of Financial Instruments / Determine knowledge An annuity due pays $120,000 each year for 80 years. If the going rate of interest is 40 percent per year, the present value of this annuity due is $ Use the following formulas to complete this problem: PV=PMT [1-(1+r))) / r]*(1+3) or =PV (Rate, Nper, PMT, FV, Type).

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
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Valuation of Financial Instruments / Determine knowledge
An annuity due pays $120,000 each year for 80 years. If the going rate of interest
is 40 percent per year, the present value of this annuity due is $
Use the following formulas to complete this problem:
PV=PMT [1-(1+r))) / r]*(1+3) or =PV (Rate, Nper, PMT, FV, Type).
Transcribed Image Text:Valuation of Financial Instruments / Determine knowledge An annuity due pays $120,000 each year for 80 years. If the going rate of interest is 40 percent per year, the present value of this annuity due is $ Use the following formulas to complete this problem: PV=PMT [1-(1+r))) / r]*(1+3) or =PV (Rate, Nper, PMT, FV, Type).
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