Usinge the following table, what is the present value of $15,000 to be received
ID: 2410208 • Letter: U
Question
Usinge the following table, what is the present value of $15,000 to be received in 10 years, if the market rate is 5% compounded annually? Round your answer to two decimal places.
Periods
5%
6%
7%
10%
1
0.95238
0.94340
0.93458
0.90909
2
0.90703
0.89000
0.87344
0.82645
3
0.86384
0.83962
0.81630
0.75132
4
0.82270
0.79209
0.76290
0.68301
5
0.78353
0.74726
0.71299
0.62092
6
0.74622
0.70496
0.66634
0.56447
7
0.71068
0.66506
0.62275
0.51316
8
0.67684
0.62741
0.58201
0.46651
9
0.64461
0.59190
0.54393
0.42410
10
0.61391
0.55840
0.50835
0.38554
$
Periods
5%
6%
7%
10%
1
0.95238
0.94340
0.93458
0.90909
2
0.90703
0.89000
0.87344
0.82645
3
0.86384
0.83962
0.81630
0.75132
4
0.82270
0.79209
0.76290
0.68301
5
0.78353
0.74726
0.71299
0.62092
6
0.74622
0.70496
0.66634
0.56447
7
0.71068
0.66506
0.62275
0.51316
8
0.67684
0.62741
0.58201
0.46651
9
0.64461
0.59190
0.54393
0.42410
10
0.61391
0.55840
0.50835
0.38554
Explanation / Answer
Present Value = Future Value x Discount factor @ 5% = $ 15,000 x 0.61391 = $ 9,208.65
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