Question

For each of the following, compute the present value (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16)):

Present Value				Years			Interest Rate				Future Value
	$				12			4	%			$	17,328
	$				4			9					41,517
	$				16			12					790,382
	$				21			11					647,816

Answer 1

Case	Life /Years	Interest Rate	Future Value
A	12	4%	$17,328
B	4	9%	$41,517
C	16	12%	$790,382
D	21	11%	$647,816

Calculation of Present Value

PV = FV / (1+r)^n
where, PV = Present Value
FV = Future Value
r = Rate of Interest
n = Number of years

Case A

PV = $17,328 / (1+0.04)^12
PV = $17,328 / 1.60103222
PV = $10,823.02

Case B

PV =   $41,517 / (1+0.09)^4
PV =   $41,517 / 1.41158161
PV =   $29,411.69

Case C

PV =    $790,382 / (1+0.12)^16
PV =    $790,382 / 6.13039365
PV =    $128,928.43

Case D

PV =    $647,816 / (1+0.11)^21
PV =    $647,816 / 8.94916581
PV =    $72,388.42