Homework Answers
Ans: b) 112,300
Explanation:
A1 = $26,000
G = $2000
n = 5 years
i = 10%
A = A1 + G( A/G , i ,n )
= $26,000 + $2000 ( A/G , 10% ,5 )
= $26,000 + $2000 ( 1.8101)
= $26,000 + $3620.2
=$29620.2
Present Worth = A ( P / A , i ,n )
= $29620.2 ( P / A , 10% , 5)
= $29620.2 * 3.7908
= $112284.5 or $112285
Calculated value differs with answer value because table value is used in the calculation.
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