2.

Find the present value.

Amount per Payment: $1,000

Payment at the End of Each: Year

Number of Years: 8

Interest Rate: 6%

Compounded: Annually

Present Value: P=?

Amount per Payment at the end of each year: A=$1,000

Number of years: n=8

Interest rate: i=6%=6/100→i=0.06

Compounded Annually

P=A{[1 - (1+i) ^ (-n) ]/i}

P=$1,000{[1 - (1+0.06) ^ (-8) ]/0.06}

P=$1,000{[1-1.06^ (-8) ]/0.06}

P=$1,000[ (1-0.627412371) / 0.06]

P=$1,000 (0.372587629/0.06)

P=$1,000 (6.209793811)

P=$6,209.793810

P=$6,209.79

Answer: Present Value is $6,209.79