ABC Corporation makes an investment today (January 1, 2019). They will receive $10,000 every December 31st for the next six years (2019 – 2025). If ABC wants to earn 11.5% on the investment, what is the most they should invest on January 1, 2019?
Present value of an annuity due
Enter the known variables.
The payment, PMT, is -$10,000.
The rate is 11.5%.
The number of periods, NPER, is 6.
The Type = 1, since payment is at the beginning of the year
We go to the Formulas tab and look for the PV function.