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factor to determine its present value. To illustrate, Exhibit partial table of the present value of $1.' Exhibit 5 indicates ved in two years with

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factor to determine its present value. To illustrate, Exhibit partial table of the present value of $1.' Exhibit 5 indicates ved in two years with a market rate of interest of 10% 645. Multiplying $1,000 to be received in two years by 0.82645 yields $826.45 2645). This amount is the same amount computed earlier. In Exhibit 5, the Periods esents the number of compounding periods, and the percentage columns represent interest rate per period. Thus, the present value factor from Exhibit 5 for 12% for is 0.56743. If the interest is compounded semiannually, the interest rate is 6% 2). periods is O (5 years x 2 times per year). Thus, the present value factor 5 is a that the present value of $1 to be recei a year is 0.82645. Multiplying $1 column repr the compound five years and the number of from Exhibit 5 for 696 and 10 periods is 0.55839. Exhibit 5 Present Value of $1 at Compound Interest 1096 11% 12% 13% Periods 5%% 6% 4% 0.96154 0.956940 0.95238 0.94787 0.94340 0.93897 0.93458 090909 090090 089286 0.88496 4%96 5% 2 0.92456 0.915730 0.90703 0.89845 089000 0.88166 0.87344 0.8264S 0.81162 0.79719 0.78315 3 0.88900 0.876300 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.73119 0.71178 0.69305 5 082193 0.802450 0.78353 0.76513 0.74726 0.72988 0.71299 0.62092 0.59345 0.56743 0.S4276 6 0.79031 0.767900 0.74622 0.72525 0.70496 0.68533 0.66634 056447 053464 0.50663 048032 7 0.75992 0.734830 0.71068 0.68744 0.66506 0.64351 0.62275 0.513160.48166 0.45235 0.42506 0.85480 0.838560 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301 0.65873 0.63552 0.61332 0.73069 0.703190 0.67684 0.65160 0.62741 0.60423 058201 0.46651 0.3393 0.40388 0.37616 0.70259 0.672900 0.64461 0.61763 0.59190 0.56735 0.54393 0.42410 0.39092 0.36061 0.33288 10 0.67556 0.643930 0.61391 0.58543 055839 0.53273 0.50835 038554 035218 0.32197 0.29459 at an interest rate of 10% compounded annually, is $1,000. that the future value of S826.45 in two years, plify the illustrations and homework est rates, and the amounts are carried to only five decimal places. Computer programs and business function calculators can be used mine present values for any number of interest rates, decimal places, or periods. More complete interest tables are presented in assignments, the tables presented in this chapter are limited to 10 periods for a small number x A of the text

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