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You just settled an insurance claim. The settlement calls for increasing payments over a 10-year period. The first payment will be paid one year from now in the amount of $10,000. The following payments will increase by 4.5 percent annually. What is the value of this settlement to you today if you can earn 8 percent on your investments?

Respuesta :

Answer:

GAPV = $7,000 ×({1 - [(1 + .035) / (1 + .065)]^5} / (.065 - .035)) = $31,063.79.

Explanation: