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Question

keAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionLocator-assignment-take;&inprogress; false eBook Calculator Present Value Computations Using the present value tables, solve the following. (Click here to access the time value of money tables to use with this problem.) Round your answers to two decimal places. Required: 1. what is the present value on January 1, 2016, of $30,000 due on January 1, 2020, and discounted at 10% compounded annually? 2. what is the present value on January 1, 2016, of $40,000 due on January 1, 2020, and discounted at 11% compounded semiannually?

Explanation / Answer

Formula for PV = Face Value / (1+K)n

Applying value in formula we will get PV

1. $ 20,490.40

Here, FV = $ 30,000, n = 4 and K = 10%

2. $ 17,357.06

Here, FV = $ 40,000, n = 8 and K = 11%

3. $ 4,652.03

Here, FV = $ 50,000, n = 16 and K = 16%

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