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QUESTION 4 John expects to receive $2,000 in 2024. Calculate the present value of this cash flow assuming an interest rate of
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Answer #1

Question 4)

Future Value (FV) = $2,000

Interest Rate (r) = 6% compunded annually

r = 6 / 100 = 0.06

Time (n) = 4 years

Present Value of Future Money:

Presnet Value (PV) =

PV =

PV = 2,000 / 1.2625

PV = $1,584

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