How mu Ch would you have to invest today to receive: Use Appendix B or Appendix
ID: 2733038 • Letter: H
Question
How mu Ch would you have to invest today to receive: Use Appendix B or Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. $12,250 in 6 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present Value? b. $16,000 in 14 years at 12 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present Value? c. $6,000 each year for 13 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present Value? d. $42,000 each year for 25 years at 6 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present Value?Explanation / Answer
Solve this question in an excel sheet as follows
A. =PV(10%,6,0,-12250,0) = $6,914.81
Here 10% is the interest rate
6 is the number of years
0 is the payment made or received each year
-12250 is the future value
0 meaning payments are made at the end of the year
FV and PV have to be with opposite signs in this formula which implies cash outflow and inflow respectively.
B. =PV(12%,14,0,-16000,0) = $3,273.92
Here 12% is the interest rate
14 is the number of years
0 is the payment made or received each year
-16000 is the future value
0 meaning payments are made at the end of the year
C. =PV(9%,13,-6000,0,0) = $44,921.42
Here 9% is the interest rate
13 is the number of years
6000 is the payment received each year
0 is the future value
0 meaning payments are made at the end of the year
D. =PV(6%,25,-42000,0,0) = $536,900.96
Here 6% is the interest rate
25 is the number of years
42000 is the payment received each year
0 is the future value
0 meaning payments are made at the end of the year
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