document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1019759>Question 1019759</A>: <I><SPAN STYLE=\"word-break: break-all;\"> 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. \r<BR>\n" );
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document.write( "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%?\r<BR>\n" );
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document.write( "I would appreciate your help. <BR>\n" );
document.write( "Thanks </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #635759 by </B><A HREF=/tutors/aboutme.mpl?userid=FrankM><B>FrankM(1040)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=FrankM><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=FrankM><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=635759\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> The annuity would be worth $1000/.04 = $25000 at the time it begins. \r<BR>\n" );
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document.write( "To get to now from 5 years hence, \r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=%2425000%2F%281.04%29%5E2 ALIGN=MIDDLE  ALT=\"%2425000%2F%281.04%29%5E2\"   DISABLED_style= \"max-width:90%; height:auto;\" >\r<BR>\n" );
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document.write( "$20548.18\r<BR>\n" );
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document.write( "Note - your $21,370 incorrectly assumed $26000 value in 5 years.  </SPAN>\n" );
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