to calculate present value of $1 chart 6-4 discount rate NOT ANNUITY CHART this
ID: 2373464 • Letter: T
Question
to calculate present value of $1 chart 6-4 discount rate NOT ANNUITY CHART
this is chart 6-5 to calculate present value of an ANNUITY of a 1 discount rate
problem:
Present value calculations%u2014effects of compounding frequency, discount rates, and time periods [LO 10]
The present value of $40,000 to be received in 6 years at an interest rate of 16%, compounded annually, is $16,418.
Using a present value table (Table 6-4 and Table 6-5), your calculator, or a computer program present value function, calculate the present value of $40,000 for each of the following items (parts a%u2014f) using these facts, except
Interest is compounded semiannually. (Do not round PV factors. Round your answer to the nearest dollar amount.Omit the "$" sign in your response.)
Interest is compounded quarterly. (Do not round PV factors. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
(c)
A discount rate of 14% is used. (Do not round PV factors. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
(d)
A discount rate of 20% is used. (Do not round PV factors. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
(e)
The cash will be received in 4 years. (Do not round PV factors. Round your answer to the nearest dollar amount.Omit the "$" sign in your response.)
(f)
The cash will be received in 8 years. (Do not round PV factors. Round your answer to the nearest dollar amount.Omit the "$" sign in your response.)
The present value of $40,000 to be received in 6 years at an interest rate of 16%, compounded annually, is $16,418.
Explanation / Answer
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