You are paid £5,000 annually for 10 years, with the first payment due in one year and the last payment due in 10 years. What is the present value of all these payments using an interest rate of 4%? £ Number Enter an answer correct to 2 decimal places.

You are paid £5,000 annually for 10 years, with the first payment due in one year and the last payment due in 10 years. What is the present value of all these payments using an interest rate of 4%? £ Number Enter an answer correct to 2 decimal places.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

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You are paid £5,000 annually for 10 years, with the first payment due in one year and the last payment due in 10 years.
What is the present value of all these payments using an interest rate of 4%?
£ Number
Enter an answer correct to 2 decimal places.

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