Please use a table for the following questions, please show me the formulas used: 1. Assume that you are to receive $60,000 in 10 years.
Please use a table for the following questions, please show me the formulas used:
1. Assume that you are to receive $60,000 in 10 years. The current market rate of interest is 5%.
a. Using the present value of $1 table, determine the present value of this amount compounded annually.
b. Why is the present value less than the $60,000 to be received in the future?
2. Determine the present value of $300,000 to be received at the end of each of four years, using the interest rate of 8%, compounded annually, as follows:
a. By successive computations using the present value of $1 table.
b. By using the present value of an annuity of $1 table.
c. Why is the present value of the four $300,000 cash receipts less than the $1,200,000 to be received in the future?
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Authors: Steven M. Bragg
1st Edition
1938910702, 978-1938910708
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