Business, 08.04.2020 23:10 Rakeem458

John plans to make an investment today which promises to return to him $4,000 each year for five (5) years beginning one year from today. The investment account will earn 7% compounded annually. At the end of five years, the investment account balance will be zero. Rounding to the nearest whole dollar, what should be the amount of John's original investment?
$16,401

PV of annuity = PMT x Table 4 factor (n= 5, I = 7%) PV of annuity = $4,000 x 4.10020 = $16,400.80

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