rks Window Hep CenpigeNoW 1 Online teaching and learning resource from Cengage L
ID: 2521509 • Letter: R
Question
rks Window Hep CenpigeNoW 1 Online teaching and learning resource from Cengage Learning nt: Chapter 10 Assignment Assigrment Scoee: 774 Save Exit Submit Assignment for Grad ZExercise 10-08 Check My Weel Exercise 10-8 Determining an Advance Payment Katie Davis is contemplating paying five years' rent in advance. Her annual rent is $12,600 Note: The following Table 2 on present value may be used where apropriate to soive this problem. Calculate the single sum that would have to be paid now for the advance rent. Assume cempound Interest of 8 percent. Round your answer to the nearest cent An ordinary ennuity is a series of equal payments or receipts thet will begin one time period from the curent date of property and is to receive $18,000 in three equal annual payments of $6,000 beginning one year from today. What is the present Vickie Long has sold a piece value of this sale if the current interest rabe is 5 percent of the three of three $1 percent intersects the row for periad 3 shows a factor of 2.723, which is Refer to Teble 2 in Appendix C. The point at which the 5 present value factors in the table above (0.952+0.907 0.964- 2.723),when muitiplied by $1,t payments (spaced one year apart) at compound interest of S percent. Thus, we solive the probiem as follows factor gives the present value 96,000 Payment: s6 14,000 8 9 0 4 5 6 3 0Explanation / Answer
present value of rent payment
Year
rent payment
rent payment/(1+r)^n r= 8%
1
12600
12600/(1.08)^1
11666.67
2
12600
12600/(1.08)^2
10802.47
3
12600
12600/(1.08)^3
10002.29
4
12600
12600/(1.08)^4
9261.376
5
12600
12600/(1.08)^5
8575.348
present value of rent payment
sum of present value of rent payment
50308.15
present value of rent payment
Year
rent payment
rent payment/(1+r)^n r= 8%
1
12600
12600/(1.08)^1
11666.67
2
12600
12600/(1.08)^2
10802.47
3
12600
12600/(1.08)^3
10002.29
4
12600
12600/(1.08)^4
9261.376
5
12600
12600/(1.08)^5
8575.348
present value of rent payment
sum of present value of rent payment
50308.15
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.