Question: Using either the Present Value formaula or the Future Value formula, how do I solve the following problem? Show all work! PV(CF) = CF /

Using either the Present Value formaula or the Future Value formula, how do I solve the following problem? Show all work!

PV(CF) = CF / (1+r)ⁿ

FV(CF) = CF * (1+r)ⁿ

Mr. Johnson wants to buy an annuity due that will provide him with income of $50,000 per year for six years. The going interest rate is 6.25%. How much would it cost him to buy the annuity today? (Draw a timeline and show your work.)

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