Question

What's the present value, when interest rates are 6.80 percent, of a $280 payment made every year forever

Answer 1

Answer:

$4,118

Explanation:

The computation of the present value is shown below:

Present value is

= Payment made every year ÷ rate of interest

= $280 ÷ 6.80%

= $4,118

Hence, the present value is $4,118 and the same is to be considered

We simply divide the payment made every year from the rate of interest so that the present value could come