Find the total value of the given income stream and also find its present value (at the beginning of the given interval)using the given interest rate.
A)TV = $250,000, PV =$1,512,966.53
B)TV = $10,000, PV = $1,331,148.35
C)TV = $250,000, PV = $85,097.47
D)TV = $0, PV = $9,360.72
E)TV = $0, PV = $85,097.47

Question

Find the total value of the given income stream and also find its present value (at the beginning of the given interval)using the given interest rate. 
A)TV = $250,000, PV =$1,512,966.53 
B)TV = $10,000, PV = $1,331,148.35 
C)TV = $250,000, PV = $85,097.47 
D)TV = $0, PV = $9,360.72 
E)TV = $0, PV = $85,097.47

Quizplus · Accepted Answer

The present value of an annuity formula is used to find the PV of the income stream. Using the formula with the given information, we get PV = $85,097.47. Therefore, (C) is the correct answer. The other choices have incorrect values for TV and/or PV.

Find the Total Value of the Given Income Stream and Also