QUESTION 9 Jonah has the choice of paying Rita $20,000 today or $80,000 in ten years....

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business accounting

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Answer 1

Answer #1

Answer:

Given data:

future value = $ 80,000
Rate of return = 11%
Time period = 10 years

Calculate the present value for $ 80,000 in the following way:

Future value = present value ( 1 + r )^ t

substitute the values in above formula:

$ 80,000 = p (1+11/100)^10
$ 80,000 = p(1+0.11)^10
$ 80,000 = p(1.11)^10
$ 80,000 = p(2.839..)
Present value = $ 80,000/2.839
Present value = $ 28,179

Therefore ,the present value of the $ 80,000 is $ 28,179 approximately.

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Answer 2

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