Read the example about how to calculate the present value of an ordinary annuity. Now consider a
Question:
Read the example about how to calculate the present value of an ordinary annuity. Now consider a slightly different question. You loaned $57,134 to a firm just now. The term is 11 years. The firm promises to pay you an annual interest of $5,636 at the end of each year. Moreover, it will will also repay the principal on the due date. The annual discount rate is 6%. Please use a financial calculator to find the present value of all the payments that the firm will make to you regarding the loan.
Hints:
• The sequence of interest payments is an ordinary annuity,
• The payment of the principal on the due date should be entered as FV.
• All payments are cash inflows for you, so they should all be entered as positive numbers.
Introduction to Business Law
ISBN: 9780324826999
3rd Edition
Authors: Jeff rey F. Beatty, Susan S. Samuelson