an insurance company is willing to settle a dispute with you. They will pay you$

Question

an insurance company is willing to settle a dispute with you. They will pay you$7000 per year for the next 8 years or one lump sum right now . Assuming your money is worth 5%, how much would you be willing to pay for the property an insurance company is willing to settle a dispute with you. They will pay you$7000 per year for the next 8 years or one lump sum right now . Assuming your money is worth 5%, how much would you be willing to pay for the property an insurance company is willing to settle a dispute with you. They will pay you$7000 per year for the next 8 years or one lump sum right now . Assuming your money is worth 5%, how much would you be willing to pay for the property

Explanation / Answer

Value of the property = Cash Flows * PVAF ( 5%,8 years)

= 7000*6.4632 i.e 45242.4893

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