$.$ Dont answer with the image shown below those equations are wrong.Step $2$

a$.$ How much would you be willing to invest today?

Explanation:

We need to calculate the present value of the $10$ annual payments, starting from $26$ years later. To do this, we need to discount the

payments by the interest rate for $26$ years, using the PV function.

The formula is:

$=PV(0\mathrm{.}01,26**12,0,-PV(0\mathrm{.}01,120,5000,0,1),0)$

The result is $$3,788\mathrm{.}76.$

This means we would be willing to invest $$3,788\mathrm{.}76$ today to receive $10$ annual payments of $$5,000$ each, starting from $26$ years later, at a $12\%$

annual interest rate compounded monthly.

Step $3$

b$.$ How much would the money $($that you will be willing to invest today$)$ be worth at the end of your last payment $($i$.$ e$.,$ in year $35)?$

Explanation:

We need to calculate the future value of the investment at the end of the last payment, which is in year $35.$

To do this, we need to compound the present value by the interest rate for $35$ years, using the FV function.

The formula is:

$=FV(0\mathrm{.}01,35**12,0,-3788\mathrm{.}76,0)$

The result is $$1,073,904\mathrm{.}64.$

This means the money we invested today would be worth $$1,073,904\mathrm{.}64$ at the end of the last payment, in year $35,$ at a $12\%$ annual interest rate

compounded monthly.

Answer

a$.$ The result is $$3,788\mathrm{.}76.$

This means we would be willing to invest $$3,788\mathrm{.}76$ today to receive $10$ annual payments of $$5,000$ each, starting from $26$ years later, at a $12\%$

annual interest rate compounded monthly.

b$.$ The result is $$1,073,904\mathrm{.}64.$

This means the money you invested today would be worth $$1,073,904\mathrm{.}64$ at the end of the last payment, in year $35,$ at a $12\%$ annual interest rate

compounded monthly.

Was thls solution helpful?

Answer the question below with excel formulas and check my work as well. Complete the question asked in yellow and show full work

You are offered the opportunity to put some money away for retirement. You will receive $10$ annual payments of $$5,000$ each beginning in $26$ years. If you desire an annual interest rate of $12\%$ compounded monthly, answer the following two questions:

a$.$ How much would you be willing to invest today?

a$.$

b$.$ How much would the money $($that you will be willing to invest today$)$ be worth at the end of your last payment $($i$.$e$.,$ in year $35)?$