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).
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).
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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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).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c7248f6-637b-4c4d-b572-0793cd0fd38f%2Fa2637329-402f-4a7f-945d-7edad0665d8e%2Fz5lq9jt_processed.jpeg&w=3840&q=75)
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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