finance help about annuity!!?
hey, i have to calculate the present value of an annuity with annual payments of 5,300 and 7% interest, but it is an infinite payment type (so it become a perpetuity, right?) anyways, can someone tell me how to figure out the present value for this?? THANKSS!
Public Comments
- In other words, how much must you invest today (the Present) to earn 5,300 every year in perpetuity, at 7%? Let x = that amount x @ 7% = 5,300. x = 5,300 / .07 x = 75,714.29 As long as that amount is invested at 7%, it will return 5,300 each year.
