Question

Homework: Chapter 5 Homework Next Question Score: 0 of 1 pt 3 of 21 (1 complete) Problem 5-4 (similar to) (Present value) What is the present value of the following future amounts? a. $600 to be received 10 years from now discounted back to the present at 10 percent b. $200 to be received 7 years from now discounted back to the present at 9 percent. c. $1,100 to be received 11 years from now discounted back to the present at 5 percent d. $1,100 to be received 6 years from now discounted back to the present at 19 percent. a. What is the present value of $600 to be received 10 years from now discounted back to the present at 10 percent? (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer Clear All 2 parts

Answer 1

PV = FV / (1 + r)^t

a. PV = $600 / 1.10¹⁰ = $231.33

b. PV = $200 / 1.09⁷ = $109.41

c. PV = $1,100 / 1.05¹¹ = $643.15

d. PV = $1,100 / 1.19⁶ = $387.36