Answer:
PV $54,509.5346
Explanation:
We will calcualte the present value of an annuity of 8,000 for 12 years at 10% discount rate:
The formula of annuity is:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 8,000 dollars
time 12 years
rate 10% = 10/100 = 0.10
[tex]8000 \times \frac{1-(1+0.1)^{-12} }{0.1} = PV\\[/tex]
PV $54,509.5346
