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A contract for 75 million is signed today that will be paid in 3 years-at 15% interest what is the present value
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Answer #1

Amount in 3 year’s time is 75million

Interest rate (i)= 15% per annum. = 0.15

So, the present value of the contract =

75,000,000 / (1+i)3

= 75,000,000 / 1.153

= 49,313,717.4

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