SOLUTION: I just wanted to know the steps on how to get the answer because I know the answer is $21,370, but I am unsure of the steps that need to taken. A perpetuity will pay $1,000 per

Question 1019759: I just wanted to know the steps on how to get the answer because I know the answer is $21,370, but I am unsure of the steps that need to taken.
A perpetuity will pay $1,000 per year, starting 5 years after the perpetuity is purchased. What is the present value of this perpetuity on the date that it is purchased, given that the interest rate is 4%?
I would appreciate your help.
Thanks
Answer by FrankM(1040) (Show Source): You can put this solution on YOUR website!
The annuity would be worth $1000/.04 = $25000 at the time it begins.
To get to now from 5 years hence,

$20548.18
Note - your $21,370 incorrectly assumed $26000 value in 5 years.
RELATED QUESTIONS
Hello, am trying to solve this problem and and no clue where to start. I actually can't... (answered by umnikmo)

I have a test tomorrow and these questions will be dominant on the test (12x to the... (answered by fractalier)

I am homeschooled and I have worked on this problem for hours. My mom finally gave me... (answered by mananth)

I can not seem to get the correct answer on this problem. I know the answer is 145/156,... (answered by vleith)

log(base 2)(9x+11)=3+log(base 2)(x+3) I know the answer is 13 I just dont know the steps... (answered by josmiceli)

I am unsure how to get this answer to this question(3n-4)/4n-3n=-1. I believe the answer (answered by Fombitz,ewatrrr)

I am homeschooled and I have worked on this problem for hours. My mom finally gave me... (answered by sudhanshu_kmr)

I know the answer is k > -21 for 5(2k+3)-2(k-8)>3(2k+4)+k-2 but I don't know the steps... (answered by robertb)

I am having trouble. I am in college algebra and we are having to simplify rational... (answered by stanbon,algebrahouse.com)