Tuesday, April 4, 2006

Bus Terminal Math



Remember I asked the question about the present value of the stream of payments coming from Greyhound re their contribution to the Bus terminal. According to the Star, the City would receive $1.4 million payable $48,000 per year for 30 years

A friend of mine involved in financial matters did a present value calculation for me and I found a calculator that also does it.

Here is what I found:

  • "If you were to receive $48,000.00 every time period (e.g. every month, six months, or every year) for the next 30 periods, and you continually reinvested this amount at a rate of 5%, the total series of cash flows at the end of the annuity's life would be worth $737,877.65 today."

I understand that the City has a new Treasurer. Perhaps he can tell me if my math is correct and what the significance of all this is to City finances respecting the terminal.

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