What is the present value of the following? $8,000 in 13 years at 8 percent? $18,000 in 7 years at 9 percent? $27,800 in 18 years at 10 percent?
The Present Value is calculated by using the following formula
Present Value = Future Value / (1 + r)n
Where, “r” is the Interest Rate and “n” is the number of periods
Present Value of 8,000 in 13 years at 8 percent
Present Value = Future Value / (1 + r)n
= $8,000 / (1 + 0.08)13
= $8,000 / 2.71962
= $2,941.58
Present Value of $18,000 in 7 years at 9 percent
Present Value = Future Value / (1 + r)n
= $18,000 / (1 + 0.09)7
= $18,000 / 1.82804
= $9,846.62
Present Value of $27,800 in 18 years at 10 percent
Present Value = Future Value / (1 + r)n
= $27,800 / (1 + 0.10)18
= $27,800 / 5.55992
= $5,000.07
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