Question
Asked Dec 10, 2019
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The future value of $500 to be received at the end of each year for seven years at a
discount rate of 8 percent is ? .

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Expert Answer

Step 1

Annuities are the regular payments or deposits or incomes which are paid or received at every year till the maturity date.

Step 2

Given:

Discount rate = 8%

Maturity period = 7 years

FV = $500

Step 3

Formula to calculate PV...

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FV1-(1-r) FV 1- (1+r)", PVA=- $500 1– (1.08) 0.08 $500x 0.4165 0.08 = $2,603.1850

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