D Question 16 3 pts What is the value today for a stream of payments of $100 sta
ID: 2808223 • Letter: D
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D Question 16 3 pts What is the value today for a stream of payments of $100 starting next year and continuing yearly for 20 payments? The discount rate is 10% for this time period. (hint: this does not have a terminal value--it is just 10 payments. use a spreadsheet and answer the next two questions) DQuestion 17 2 pts What is the value today for a stream of payments of $100 starting next year and continuing yearly for 50 payments? The discount rate is 10% for this time period. (hint: use the same spreadsheet as the previous problem) D Question 18 2 pts What is the value today for a stream of payments of $100 starting next year and continuing yearly for 100 payments? The discount rate is 10% for this time period. (hint: use the same spreadsheet as the previous problem)Explanation / Answer
16). PVA = P[{1 - (1 + r)-n} / r]
= $100[{1 - 1.10-20} / 0.10]
= $100[0.8514 / 0.10]
= $100 x 8.5136 = $851.36
17). PVA = P[{1 - (1 + r)-n} / r]
= $100[{1 - 1.10-50} / 0.10]
= $100[0.9915 / 0.10]
= $100 x 9.9148 = $991.48
18). PVA = P[{1 - (1 + r)-n} / r]
= $100[{1 - 1.10-100} / 0.10]
= $100[0.9999 / 0.10]
= $100 x 9.9993 = $999.93
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