3. Calculating Present Values [LO2] For each of the following, compute the prese

ID: 2819138 • Letter: 3

Question

3. Calculating Present Values [LO2] For each of the following, compute the present 2 value: Present Value Future Value Years 13 4 29 40 Interest Rate $15,451 51,557 886,073 550,164 9% 7 24 35 Calculating Interest Rates [LO3] Solve for the unknown interest rate in each of the following: 4. Present Value Future Value Years 4 18 19 25 Interest Rate $297 1,080 185,382 531,618 $ 181 335 48,000 40,353 5. Calculating the Number of Periods [LO4] Solve for the unknown number of years in each of the following: Present Value Years Interest Rate Future Value $ 560 810 18,400 21,500 6% $ 1,389 1,821 289,715 430,258 13

Explanation / Answer

Note: All given questions are separate and independent. So as per rule I am answering first question only.

Question – 3;

Present value

Years

Interest rate

Future value

$5,039.79

$15451

$39,332.59

$51557

$1,730.78

24%

$886073

$3.37

35%

$550164

Explanation;

Present value will be calculated as follow;

Formula of calculating present value is as follow;

Present value = Future value / (1 + Interest rate)n

Now, let’s calculate present value of each case;

Present value $15451 / (1 + .09)13 = $5,039.79

Present value $51557 / (1 + .07)4 = $39,332.59

Present value $886073 / (1 + .24)29 = $1,730.78

Present value $550164 / (1 + .35)40 = $3.37