For each of the following, compute the present value: (Do not round intermediate calculations and round your answers to 2 decimal

For each of the following, compute the present value: (Do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)

Results are below. Explanation: Giving the following information: Years – Interest Rate – Future Value 9 7% $18,828 1 12% 43,017 13 15% 805,382 18 14% 662,816 To calculate the present value, we need to use the following formula: PV= FV/(1+i)^n 1: PV= 18,828/(1.07^9)= $10,241.18 2: PV= 43,017/(1.12)= $38,408.04 3: PV= 805,382/(1.15^13)= $130,897.1 4: PV= 662,816/(1.14^18)= $62,676.63

Explanation: Present Value     Years   Interest Rate   Future Value
      PV                     n                   r                  FV 1.  $10,681              10                6%            $19,128
2. $35,157              2                 11%            $43,317
3. $129,107            14                14%            $808,382
4. $65,293            19                13%            $665,816 Present value of future cash flow will be calculated by using discount formula which is as follow: PV = FV / ( 1 + r ) ^n 1.  PV = $19,128 / ( 1 + 0.06 )^10 = $10,681 2. PV = $43,317 / ( 1 + 0.11 )^2 = $35,157 3. PV = $808,382 / ( 1 + 0.14 ) ^14 = $129,107 4. PV = $665,816 / ( 1 + 0.13 ) ^19 = $65,293

Also Read :   What is the purpose of ncua lending regulations?

Leave a Comment