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A quick question:

Suppose we have a liability stream which is an annuity of USD $1,000,000$ per year, for the next $40$ years. Does this mean that we do not include discounted rates and assume that the liability of USD $1,000,000$ remains constant throughout the $40$ years?

Stoner
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    If you want to calculate the present value or the future value of the liability stream you have to include an appropiate interest rate. – callculus42 Oct 24 '17 at 16:04
  • Hmm.. However the question states that there is no change in annuity each year. Doesn't that mean that interest rates of all sorts are negligible? – Stoner Oct 24 '17 at 23:52

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