For each of the following, compute the present value (Enter rounded answers as d

Question

For each of the following, compute the present value (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16)):

Present Value    Years     Interest Rate   Future Value

$                              9                6 %             $ 17,628

$                               1               12                   41,817

$                              13               15                 793,382

$                               18               14                  650,816

Explanation / Answer

Present value = C / (1+r)n

1. Present value = 17628 / (1+6%)9

= 17628/ (1.06)9

  = 10433.99

2. Present value = 41817 / (1.12)1

= 37336.61

3. Present value = 793382 / (1.15)13

= 128946.76

4. Present value = 650816 / (1.14)18

= 61541.90.

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