Question

Question 14

Your uncle offers to sell you his vintage Amilcar Tourer. He suggests a payment plan where you pay just $4,000 today, 5,000 in 6 months and $9,000 in exactly 12 months from today. If the interest rate is 12% per annum compounding monthly, what is the value of the offer (in present day dollars)?

Select one:

A. $16,697.27

B. $16,752.70

C. $17,090.64

D. $17,329.74

Answer 1

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FINANCIAL FORMULA IS USED. NO EXCEL FUNCTION IS USED. ONLY WRITTEN IN EXCEL

0923 dx ENG 03 01 2020 PV, FV, ANNUITY (Autusaved) - Excel pravin mandura O Tell me what you want to do I lelp A Share Tile Ilome Insert Page Layuut Formulas Dala Review View X Cut Σ Αtaδnm v11 b Wrap Text Calibri General A Copy- O Fill - Conditional Farmat as Cell Paste Insert Delete Format Sart & Find & = = = E = E Merge & Center BIU- - • Clear Format Painter Filter- Select Formatting- Table- Styles- Clipbcard Fort Aignment Number Styies Cels Edrng fr KT151 KS KT KU KV KW KX KY KZ LA LB 140 141 142 RATE = 12% 143 MONTHLY RATE = 1% 144 PRESENT VALUE = 4000 TODAY + 5000 IN 6 MONTHS + 9000 IN 12 MONTHS 145 146 4000 + 5000/(1+0.01)^6 + 9000/(1+0.01)^12 PRESENT VALUE = 147 ANSWER : A: PRESENT VALUE = 16697.27 148 149 150 151 152 153 154 155 156 157 158 159 160 161 • . pv, fv, annuity CAP STRU VALUE PM, PMI | loan with points LOCK BOX DILUTION | DOLLAR COST AVG | EXPO NPER APR CPI| ear FVA pva s2 53| SIATE s6 s/ s8 Ready circuar References + 1J0%