Answer:
The answer is "present value= 9952.87"
Explanation:
Given value:
[tex]time = 4 -year \\\\annuity = \$2,250\\\\additional = \$2,400\\\\rate = 5 \%\\[/tex]
[tex]present\ value=?[/tex]
Using formula: [tex]\bold{Present\ value = cash \ inflow} \times \bold{Present \ value \ of \ discounting \ factor} \bold{( rate \% ,\ time \ period)}[/tex][tex]=\frac{\$2250}{1.05}+\frac{\$2250}{1.05^2}+\frac{\$2250}{1.05^3}+\frac{\$2250}{1.05^4}+\frac{\$2400}{1.05^4}\\\\=\$2250 (\frac{1}{1.05}+\frac{1}{1.05^2}+\frac{1}{1.05^3}+\frac{1}{1.05^4}) + \frac{2400}{1.05^4}\\\\=(2250\times 3.545950504)+(2400\times 0.822702474)\\\\=\$9952.87 .[/tex]
