Answer:
Result are below.
Explanation:
Giving the following information:
Annual payment= $65
Number of periods= 19 years
I will assume an interest rate of 8%.
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual payment
FV= {65*[(1.08^19) - 1]} / 0.08
FV= $2,694 + 1,000
FV= $3,694
Now, the present value:
PV= FV/(1+i)^n
PV= 3,694 / (1.08^19)
PV= $855.95
