Thomas Eskridge expects to receive $2000 at the end of three years. What is the

Question

Thomas Eskridge expects to receive $2000 at the end of three years. What is the present value of thi amount assuming a 6% annual compound interest rate round your answer to the nearest dollar)? Present Value Interest Factors Period 2%496 6% 8% 10% 12% 15% 20% 1 9804 9615 9434 9259 9091 89298696 8333 29612 926 8900 8573 8264 7972 7561 6944 3 9423 8890 8396 7938 7513 7118 6575 5787 4 .9238 .8548 J921 J350 .6830 .635S 5718 A823 5 9057 8319 7473 68066209 5674 4972 019 6 .8880 .7903 050 6302 5645 S066 4323 .3349 8706 7599 665 5835 5132 A523 3759 2791 88535 7307 6274 5403 65 4039 3269 2326 9 8363 7026 5919 5002 4243606 2843 1938 10 8203 6756 5584 632 3855 3220 2472 1615 11 80436496 5268 A289 3505 2875 2149 1346 12 78856246 A970 3971 3186 2567 1869 1122 13 730 6006 A688 3677 897 22921625 0935 14 7579775 423 340 2633 2046 1413 0779 IS .7430 .5553 A173 3152 .2394 .1827 .1229 .0649 16 7284 5339 3936 291 2176 1631 1069 0541 1 7142134 3714 2703 1978 1456 0929 0451 18 .7002 .4936 3503 2502 .1799 .1300 .0808 .0376 8 19 6864 4746 3305 20 ,6730 AS64 3118 2145 .1486 0037 .0611 0261 0 a. $1679 o b. $1460 C c. $1524 d. $925

Explanation / Answer

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=2000/1.06^3

=$2000*0.8396

=$1679(A)(Approx)

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