Question
At the end of three years, when you graduate from college, your father has promised to give you a used car that will cost $12,000.
At the end of three years, when you graduate from college, your father has promised to give you a used car that will cost $12,000.
Click here to view Exhibit 11B-1, to determine the appropriate discount factor using tables. |
Required: | |
1-a. | What lump sum must he invest now to have the $12,000 at the end of three years if he can invest money at six percent? (Round discount factor to 3 decimal places, intermediate and final answer to the nearest dollar amount.) |
Present value | $ |
1-b. | What lump sum must he invest now to have the $12,000 at the end of three years if he can invest money at ten percent? (Round discount factor to 3 decimal places, intermediate and final answer to the nearest dollar amount.) |
Present value | $ |
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