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    ajvcs's Avatar
    ajvcs Posts: 1, Reputation: 1
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    #1

    Nov 16, 2009, 06:39 PM
    Long term finance activities
    What is an agreement between two or more companies to share a business project?
    47flower's Avatar
    47flower Posts: 15, Reputation: 1
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    #2

    Nov 16, 2009, 08:39 PM

    After a protracted legal case, Joe won a settlement that will pay him $11,000 each year year at the endof the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, so there will be nothing left in the account after the final payment is made?
    47flower's Avatar
    47flower Posts: 15, Reputation: 1
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    #3

    Nov 16, 2009, 08:41 PM
    PV of annuity factor
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #4

    Nov 18, 2009, 08:29 PM

    Yes, you're going to use PV of annuity. You're trying to figure out what must be put into the investment today so that those payments may be made over the next 10 years. The "payments" make it an annuity.

    Have you attempted to actually work this out?

    P.S. Please don't tag onto other people's posts because it's confusing, especially when it's not even related.

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