document.write( "Question 1199360: Art wants to know how much he'll have to invest today to receive an annuity of $8,000 for three years if interest is earned at 10% annually. \n" ); document.write( "
Algebra.Com's Answer #833213 by Theo(13342)\"\" \"About 
You can put this solution on YOUR website!
you can use a financial calculator to solve this, but it's small enough so that you can also do it manually.
\n" ); document.write( "i'll do all 3.
\n" ); document.write( "the assumption is that he will start receiving the annuity in one year.
\n" ); document.write( "using a calculator, i get a present value of 19,894.82.\r
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\n" ); document.write( "\n" ); document.write( "doing it manually, you would do the following.
\n" ); document.write( "8000 / 1.10 = 7272.73 rounded to 2 decimal places.
\n" ); document.write( "8000 / 1.10^2 = 6611.57 rounded to 2 decimal places.
\n" ); document.write( "8000 / 1.10^3 = 6010.52 rounded to 2 decimal places.
\n" ); document.write( "the present value sum is equal to 19894.82.\r
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\n" ); document.write( "\n" ); document.write( "the present values agree, as hey should.\r
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\n" ); document.write( "\n" ); document.write( "your solution is that you would have to invest 19894.82 today so that you could receive 8000 for the next 3 years when the interest rate is 10% per year.\r
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