Suppose that the present value of an annuity will provide 16 payments of $3100 once a year. If the first payment will come 15 years from now, and the annual rate of interest is 11.6%, what is the present value of the annuity?
Wording in this question seems a little vague.
How I approached this was: Since the first payment is in 15 years and you need to find present value,
S = 3100(((1+0.116/16)^16)-1)/(0.116/16)) = 52390.44
Then discount back 16 years to present time: 52390.44(1.116)^-16 = 9049.51
Although that answer is wrong, any help appreciated!
EDIT: Found answer, interpreted it wrong, the person wants 3100 each year for 16 years starting 15 years from the present
3100(((1.116)^16)-1/.116)*(1.116^-30) = 4756.10