Homework Answers
| Amount paid now | 900 | |
| Present value of $2200 | 1958 | =2200*0.89000 |
| Present value of Alternative 1 | 2858 | |
| Present value of Alternative 2 | 3107 | =3700*0.83962 |
| On the present value basis,Alternative 1 is preferable | ||
| Workings for PV factor: | ||
| 1/1.06^2 = 0.89000 | ||
| 1/1.06^3 = 0.83962 | ||
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Nancy Thomas has a $2,800 overdue debt for medical books and supplies at Joe's Bookstore. She...
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The future value
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Click here to view factor tables
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