1) Find the present value of the following investment. I loan mybrother money so
ID: 1249540 • Letter: 1
Question
1) Find the present value of the following investment. I loan mybrother money so he can buy a corner gas station. At the end ofyear three he will re-pay $4,000 which will increase by 7% per yearthrough year 8.( A total of 6 payments) At 10% interest what is thepresent value of the loan.
16,845
17,980
18,789
20,384
1) Find the present value of the following investment. I loan mybrother money so he can buy a corner gas station. At the end ofyear three he will re-pay $4,000 which will increase by 7% per yearthrough year 8.( A total of 6 payments) At 10% interest what is thepresent value of the loan.
16,845
17,980
18,789
20,384
Explanation / Answer
Year
Payment Amount
Present Value Factor at 10%
Present Values
0.751315
0.683014
0.620921
0.564474
0.513158
0.466506
Year
Payment Amount
Present Value Factor at 10%
Present Values
3 $4,000.000.751315
$3,005.26 4 $4,280.000.683014
$2,923.30 5 $4,579.600.620921
$2,843.57 6 $4,900.170.564474
$2,766.02 7 $5,243.180.513158
$2,690.58 8 $5,610.210.466506
$2,617.20 Present Value of the Loan $16,845.93Related Questions
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