What is the present value of the following annuity 2110 ever

What is the present value of the following annuity? $2,110 every year at the end of the year for the next 11 years, discounted back to the present at 12.46 percent per year, compounded annually?

Solution

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=2110/1.1246+2110/1.1246^2+2110/1.1246^3+..........+2110/1.1246^11

=2110[1/1.1246+1/1.1246^2+1/1.1246^3+........+1/1.1246^11]

=$2110*5.820202371

which is equal to

=$12280.63(approx)(Please note that intermediate calculations have not been rounded off].