Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook As

Question

Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Assignment> Open Assignment CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Brief Exercise G-9 Appendix G Graded HW Brief Exercise G-6 (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Brief Exercise G-14 Review Score Review Results by Study (a) what is the present value of $25,000 due 8 periods from now, discounted at 4%? (Round answer to 2 decimal places, e.g. 25.25.) Objective Present value s (b) what is the present value of $25,000 to be received at the end of each of 4 periods, discounted at 4%? (Round answer to 2 decimal places, e.g. 25.25.) Present value LINK TO TEXT Question Attempts: o of 2 used SAVE FOR LATER SUBMITA

Explanation / Answer

Ans a. PV = FV [ 1 / ((1 + i)^n) ] Where :- PV = present value FV = Future value (25000) I = discount rate(4%) n= no. of periods (8) So the value given in table for 4% & 8 periods is 1.36857 So PV = 25000 / 1.36857 = 18267.24 Ans b. Annual amount to be received Future value Annual amount / future value 25000 1.04 24038.46 25000 1.0816 23113.91 25000 1.12486 22224.99 25000 1.16986 21370.08 Total present value 90747.43

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