need help! intro to accounting 1. determine present value of $15,000 to be paid

Question

need help! intro to accounting

1. determine present value of $15,000 to be paid anually for 10 years. discounted at annual rate of 6%. payments occur end of each year.

2. determine present value of $9200 to be received today. assuming the money will be invested in a 2 year deposit earning 8% anually.

3.determine present value of $300 paid monthly for 36 months. with additional payment of $12,000 at the end of 36 month. discounted at monthly interest rate of 1.5%. the first payment is to be one month from today.

4. determine present value of $25,000 to be received annually for first three years followed by $15,000 to be received anually for the following two years. discounted at annual rate of 8%. assume collections occur at year end.

Explanation / Answer

Ans.1 Present value= $15000*PVAF(6%,10years) Year Cash Flow PVAF6% Amount 1 $15,000 0.9434 $14,151 2 $15,000 0.8900 $13,350 3 $15,000 0.8396 $12,594 4 $15,000 0.7921 $11,881 5 $15,000 0.7473 $11,209 6 $15,000 0.7050 $10,574 7 $15,000 0.6651 $9,976 8 $15,000 0.6274 $9,411 9 $15,000 0.5919 $8,878 10 $15,000 0.5584 $8,376 Present value $110,401 Ans.2 No. of year=2 PVAF(2years, 8%)=1.7827 Year PVAf(8%) 1 0.9259 2 0.8573 1.7833 so, 9200/1.7833 $5,159 Ans.4 Year Cash flow PVAF(8%) Amount 1 $25,000 0.9259 $23,148 2 $25,000 0.8573 $21,433 3 $25,000 0.7938 $19,846 4 $15,000 0.7350 $11,025 5 $15,000 0.6806 $10,209 PV $85,662

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