Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Anonymous asked in Business & FinanceInvesting · 2 months ago

accounting question?

You have choice between 1000 paid at beginning of month for period of 10 years or a lump sum paid immediately. If u can invest at an effective annual interest rate of 5 percent, what is minimum lump sum u would be willing to accept?

the answer is 95152. How? 

2 Answers

  • Bryce
    Lv 7
    2 months ago
    Favorite Answer

    This uses the formula for the present value of an annuity due (with payment made at the beginning of each period).

    (1 + r/12)^12= 1.05; r≈ 0.0488894...

    x= [1 - (1 + r/12)^(-119)]/(r/12)= 94.15167...

    S= 1000[1 + x]≈ 95152

  • Anonymous
    2 months ago

    move to homework help. damn repeat cheater.

Still have questions? Get your answers by asking now.