Question

Present Value Computations

Using the present value tables, solve the following.

Round your answers to two decimal places.

Required:

What is the present value on January 1, 2016, of $30,000 due on January 1, 2020, and discounted at 10% compounded annually?

What is the present value on January 1, 2016, of $40,000 due on January 1, 2020, and discounted at 11% compounded semiannually?

What is the present value on January 1, 2016, of $50,000 due on January 1, 2020, and discounted at 16% compounded quarterly?

**The answers posted are not correct, and that's why I am reposting this question. Thank you!

Answer 1

(a)	Present value	=	A*(1+i)^-n		Where,
		=	30000*(1+0.10)^-4		A	$       30,000
		=	$ 20,490.40		i	10%
					n	4
(b)	Present value	=	A*(1+i)^-n		Where,
		=	40000*(1+0.055)^-8		A	$       40,000
		=	$ 26,063.95		i	11%	/	2	=	0.055
					n	4	*	2	=	8
(c)	Present value	=	A*(1+i)^-n		Where,
		=	50000*(1+0.04)^-16		A	$       50,000
		=	$ 26,695.41		i	16%	/	4	=	0.04
					n	4	*	4	=	16