What is the present value of a stream of payments of $200 per year for 5 years with the first payment being received exactly 5 years from now if the interest rate is 8%? The present value is $ \boxed{} (Round your answer to the nearest penny)
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Since the first payment is received after 5 years from now, we need to discount it back to the present value. The discount factor can be calculated using the formula: Discount factor = 1 / (1 + r)^n Where r is the discount rate and n is the number of years. In Show more…
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