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.