Robertson Company receives a $79,400, 5-year note bearing interest of 5% (paid a

Question

Robertson Company receives a $79,400, 5-year note bearing interest of 5% (paid annually) from a customer at a time when the discount rate is 10%.

Click here to view the factor table.

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What is the present value of the note received by Robertson? (Round answer to 2 decimal places, e.g. 25.25.)

Present value of note received

$
Robertson Company receives a $79,400, 5-year note bearing interest of 5% (paid annually) from a customer at a time when the discount rate is 10%.

Click here to view the factor table.

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What is the present value of the note received by Robertson? (Round answer to 2 decimal places, e.g. 25.25.)

Present value of note received

$ $ Present value of note received

$

Explanation / Answer

If you want to use the financial calculator, Here it is

FV = 79400

I = 10%

PMT = 5%*79400

N = 5

The present value is $64,350.58

To calculate manualy,

Annual payment = 5%*794003970

PV = 3970 /(1+10%)^1 + 3970/(1+10%)^2 + 3970 /(1+10%)^3 + 3970/(1+10%)^4 + 3970 /(1+10%)^5 + 79400/(1+10%)^5

= $64,350.58

Please ask me for any more details

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