ZuoTi.Pro
Question

Present Value of Amounts Due

Assume that you are going to receive $700,000 in 10 years. The current market rate of interest is 5.5%.

a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar.
$

b. Why is the present value less than the $700,000 to be received in the future?
The present value is less due to the compounding of interest  over the 10 years.


accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)

All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Present Value of Amounts Due Assume that you are going to receive $700,000 in 10 years. The current market rate of interest is 5.5%. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Rou
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Similar Homework Help Questions

  • Present Value of Amounts Due Assume that you are going to receive $280,000 in 10 years....

    Present Value of Amounts Due Assume that you are going to receive $280,000 in 10 years. The current market rate of interest is 5%, compounded annually. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. $ b. Why is the present value less than the $280,000 to be received in the future? The present value is less due to ______ over the 10...

  • EXHIBIT 5 EXHIBIT 7 Present Value of an Annuity Determine the present value of $260,000 to...

    EXHIBIT 5 EXHIBIT 7 Present Value of an Annuity Determine the present value of $260,000 to be received at the end of each of four years, using an interest rate of 10%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in...

  • Determine the present value of $310,000 to be received in three years, using an interest rate...

    Determine the present value of $310,000 to be received in three years, using an interest rate of 5.5%, compounded annually. Use the present value table in Exhibit 8. Round to the nearest whole dollar. Determine the present value of $220,000 to be received at the end of each of four years, using an interest rate of 6%, compounded annually, as follows: a. By successive computations, using the present value table in Exhibit 4. Round to the nearest whole dollar. First...

  • Thank you for the help! Present Value of an Annuity Determine the present value of $310,000...

    Thank you for the help! Present Value of an Annuity Determine the present value of $310,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table...

  • Present Value of an Annuity Determine the present value of $130,000 to be received at the...

    Present Value of an Annuity Determine the present value of $130,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year $ Second Year $ Third Year $ Fourth Year $ Total present value $ b. By using the present value of an annuity of $1 table...

  • Calculator Present Value of Amounts Due Determine the present value of $730,000 to be received in...

    Calculator Present Value of Amounts Due Determine the present value of $730,000 to be received in three years, using an interest rate of 4.5%, compounded annually. Use the present value table in Exhibit 8. Round to the nearest whole dollar. 32,851 X Feedback Check My Work Review the time value of money concept.Recall that the time value of money concept recognizes that cash received today is worth more than the same amount of cash to be received in the future.

  • Present Value of an Annuity Determine the present value of $300,000 to be received at the...

    Present Value of an Annuity Determine the present value of $300,000 to be received at the end of each of four years, using an interest rate of 10 %, compounded annually, as follows a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round...

  • Determine the present value of $200,000 to be received at the end of each of four...

    Determine the present value of $200,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows: a. By successive computations, using the present value table in Exhibit 8. Round to the nearest whole dollar. First year $ Second Year $ Third Year $ Fourth Year $ Total present value $ b. By using the present value table in Exhibit 10. Round to the nearest whole dollar. $ c. Why...

  • Classify the financial problem. Assume a 10% interest rate compounded annually. Find the value of a...

    Classify the financial problem. Assume a 10% interest rate compounded annually. Find the value of a $1,000 certificate in 4 years. O sinking fund O present value future value o ordinary annuity amortization Answer the question. (Round your answer to the nearest cent.)

  • Interest rates determine the present value of future amounts. (Round to the nearest dollar.) (Click the...

    Interest rates determine the present value of future amounts. (Round to the nearest dollar.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) 5 (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Determine the present value of 10-year bonds payable with face value of $87,000 and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT