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Present Value of Amounts Due Assume that you are going to receive $350,000 in 10 years. The current market rate of interest is 7%. a.
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Present Value of Amounts Due
Assume that you are going to receive $350,000 in 10 years. The current market rate of interest is 7%.
a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. $
b. Why is the present value less than the $350,000 to be received in the future? The present value is less due to over the 10 years. A. Deflation B. Inflation C. the compounding of Interest
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