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You won a lottery that will make equal payments of $3,500 at the end of each year for the next six years. If the annual interest rate stays constant at 8%, what is the value of these payments in today’s dollars? Round your answer to the nearest whole dollar.

Respuesta :

Answer:

$16,180.08

Explanation:

Present value can be calculated using a financial calculator

Cash flow from year  1 to 6 = 3500

i = 8%

pv = $16,180.08

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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