Answer:
$307,230
Explanation:
Provided details,
Today's date = January 1, 2020
Amount to be received = $50,000
Date of receiving = Jan 1, 2021
That is after 1 year.
Total period of receiving amount = 10 years
Discount rate = 10%
Discounted present value annuity factor = [tex]\frac{1}{(1+0.1)^1} + \frac{1}{(1+0.1)^2} + \frac{1}{(1+0.1)^3} + \frac{1}{(1+0.1)^4} + \frac{1}{(1+0.1)^5} + \frac{1}{(1+0.1)^6} + \frac{1}{(1+0.1)^7} + \frac{1}{(1+0.1)^8} + \frac{1}{(1+0.1)^9} + \frac{1}{(1+0.1)^1^0}[/tex]
= 6.1446
Thus, present value of $50,000 each year received for 10 years = $50,000 [tex]\times[/tex] 6.1446 = $307,230
