An investment offers $7,500 per year for 17 years, with the first payment occurring 1 year from now. Assume the required return is 8 percent. Requirement 1: What is the value of the investment today? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 2: What would the value be if the payments occurred for 42 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 3: What would the value be if the payments occurred for 77 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 4: What would the value be if the payments occurred forever? (Enter rounded answer as directed, bu
1- The PV for 17 years would be =$68,412.29
2- The PV for 42 years would be=$90,050.24
3- The PV for 77 years would be=$93,499.77
4-The PV forever would be =$93,750.00
The formula used in these calculations is this one only:
PV=P{[1 + R]^N - 1.[1 + R]^-N} R^-1=PV OF $1 PER PERIOD,
Where R=Interest rate per period, N=number of periods, P=periodic payment. PV=Present value.
