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lukerothbacher
25.02.2020 •
Business
You just settled an insurance claim. The settlement calls for increasing payments over a five-year period. The first payment will be paid one year from now in the amount of $7,000. The following payments will increase by 3.5 percent annually. What is the value of this settlement to you today if you can earn 6.5 percent on your investments?
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Ответ:
Present Value= $26,535.51
Explanation:
Giving the following information:
The settlement calls for increasing payments over five years. The first payment will be paid one year from now in the amount of $7,000. The following payments will increase by 3.5 percent annually.
To calculate the present value, first, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual payment= 7,000
i= 6.5 + 3.5= 10%
n=5
FV= {7,000*[(1.10^5)-1]} / 0.10= $42,735.7
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 42,735.7/1.10^5=$26,535.51
Ответ:
The mixed economy has public input and government input
A free-market system is to the public where they can freely change prices and products. It is free from government intrusion