Question
An investor has asked for your help with the following time value of money applications. Table 6-4. (Use appropriate factor(s) from the tables provided. Round
An investor has asked for your help with the following time value of money applications. Table 6-4. (Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals.)
Required:
a. What is the present value of $54,000 to be received in six years using a discount rate of 12%? (Round your answer to 1 decimal place.)
b. How much should be invested today at a return on investment of 12% compounded annually to have $54,000 in six years? (Round your answer to 1 decimal place.)
c. If the return on investment was greater than 12% compounded annually, would the amount to be invested today to have $54,000 in six years be more or less than the answer to part b?
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