What is the present value of $929 to be received in 13.5 years from today if...

Question

Question

What is the present value of $929 to be received in 13.5 years from today if our discount rate is 3.5 percent?

PLEASE SHOW ME EXACTLY HOW TO DO THE PROBLEM!!!! I INSERTED A PICTURE FOR AN EXAMPLE!

Answer 1

Answer #1

The following shows how to calculate the present value of $929 to be
received 13.5 years from today when the discount rate is 3.5%.

Present Value = Future value/ ((1+r)^t)
where r is the interest rate that is 3.5% and t is the time period in years that is 13.5.
Future value = 929

Present value = 929/((1+.035)^13.5)
Present value = 929/((1.59109)
Present value = 583.8765.

The present value is $583.88.

Answer 2

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