John is entitled to a retirement income stream which pays his $30,000 per annum for next 20 years. Assume interest rate is 10% per annum and the first payment is in one year.

How much is this income stream worth in terms of PV?
If John's stream is paid every six months and each payment is $15,000, what is PV and FV of the stream?

Answer rating: 100% (QA)

To calculate the present value PV of the retirement income stream we can use the present value formu... View the full answer