Answer:
PV= $19,987.89
Explanation:
Giving the following information:
Annual payments= $2,000
Number of periods= 15 years
Interest rate= 6.35%
To calculate the present value, first, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {2,000*[(1.0635^15) - 1]} / 0.0635
FV= $47,812.25
Now, the present value:
PV= FV/(1+i)^n
PV= 47,812.25 / 1.0635^15
PV= $19,987.89
