Your crazy uncle left you a trust that will pay you $31,000 per year for the next 28 years with the first payment received one year from today. If the appropriate interest rate is 6.4 percent, what is the value of the payments today

$399,101.10

Explanation:

Since the first payment will be received one year from now, the formula for calculating the present value of an ordinary annuity is the relevant to employ as follows:

PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (1)

Where;

PV = Present value of the payments today =?

P = yearly payment = $31,000

r = interest rate = 6.4% = 0.064

n = number of years = 28

Substitute the values into equation (1) to have:

PV = $31,000 × [{1 - [1 ÷ (1+0.064)]^28} ÷ 0.064]

     = $31,000 × [{1 - [1 ÷ (1.064)]^28} ÷ 0.064]

     = $31,000 × [{1 - [0.93984962406015]^28} ÷ 0.064]

     = $31,000 × [{1 - 0.176049346439602} ÷ 0.064]

     = $31,000 × [0.823950653560398 ÷ 0.064]

     = $31,000 × 12.8742289618812

PV = $399,101.10 approximately

Therefore, the value of the payments today is $399,101.10.

the answer is either c or b, i cant be to sure tho.