The CEO of Florida Sale Away Corporation has decided, with the agreement of the Board of Directors, to buy an annuity for each of the corporate officers. He is considering the purchase of several twenty year ordinary annuities, each of which will be worth $30,000 at the end of the 20 years. He asked your boss what the present value of one of these annuities would be worth. Your boss, the Chief Financial Officer of the firm, asked you to calculate the present value of one of these 20 year ordinary annuities of $30,000 using an estimated 6% discount rate and email her your answer and an explanation of your findings.
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