What is the present value of receiving $2,000 per year starting in 3 years going for 16 years if the discount rate is 12%?
Present Value of Deferred Annuity:
The present value of deferred annuity refers to the present value of a stream of payments that start occurring some certain period of time in the future which is also known as the deferred period. Different annuities have different deferred periods.
Answer and Explanation: 1
Amount received each year (P) = $2,000
Deferred period (t) = 3
Number of years amount received (n) = 16
Discount rate (r) = 12%
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fromChapter 8 / Lesson 3
Learn how to find present value of annuity using the formula and see its derivation. Study its examples and see a difference between Ordinary Annuity and Annuity Due.