Question

Score: 0 of 2 pts 3 of 18 (0 complete) Problem 5-4 (similar to) (Present value) What is the present value of the following future amounts? a. $700 to be received 10 years from now discounted back to the present at 9 percent. b. $200 to be received 8 years from now discounted back to the present at 7 percent. c. $1,100 to be received 11 years from now discounted back to the present at 5 percent. d. $1,050 to be received 5 years from now discounted back to the present at 20 percent. a. What is the present value of $700 to be received 10 years from now discounted back to the present at 9 percent? (Round to the nearest cent.)

Answer 1

PV of Future Amounts = CF * PVF(r%, n)

PVF(r%, n) = 1 / (1+r)^n

r is Discount Rate

n is time gap

Part	CF	PVF(r%, n)	Working of PVF(r%, n)	PV of Future Amount
A	$    700.00	0.4224	1/[(1.09)^10]	$ 295.69
B	$    200.00	0.5820	1/(1.07)^8	$ 116.40
C	$ 1,100.00	0.5847	1/(1.05)^11	$ 643.15
D	$ 1,050.00	0.4019	1/(1.20)^5	$ 421.97

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