Garretson Corporation will receive $15,000 today (January 1, 2014), and also on each January 1st for the next five years (2015 - 2019).What is the present value of the six $15,000 receipts, assuming a 12% interest rate?

Question

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The present value of a single $15,000 receipt in six years, at a 12% interest rate, is $10,258. The present value of six such receipts is $61,671.

Garretson Corporation Will Receive $15,000 Today (January 1, 2014), and Also