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12 December, 02:00

An annuity pays $10 per year for 98 years. What is the present value (PV) of this annuity given that the discount rate is 7%?

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  1. 12 December, 02:13
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    It is $142.7

    Explanation:

    Annuity df = (1 - (1+r) ^-n) / r

    Annuity df @7% for 98 years = 14.27

    Pv of payment for 98 yrs = 14.27 * $10

    =$142.7
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