Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. present value of a dollar finding the present valu

Present Value of a Dollar Finding the present value of a dollar is taking a...

60.1K

Verified Solution

Question

Finance

Present Value of a Dollar

Finding the present value of a dollar is taking a lump sum from the future and finding out what it would be worth today

Example: You are promised $5,000 in three years. Interest rates are 10%. You want to see how much these payments will be worth today as a lump sum.

K = interest rate N = the number of years $ is traveling

P.V

Make a table:

F.V

$5,000

< .7513

(When bringing money back through time you must place it at the end of the table)

After the chart is set up you must refer to the present value of a dollar chart and find the number that corresponds with the interest rate and the number of years the money is traveling. Multiply this number by the amount of money being dis- counted every year and you will have the present value of that dollar.

Note: when bringing a dollar back through time, the amount will be less than what you started with.

  1. $3,000 DISCOUNTED 7 years at 12%?

  2. $3,000 DISCOUNTED 7 years at 5%?

  3. $100,000 DISCOUNTED 30 years at 10%?

  4. $100,000 DISCOUNTED 40 years at 12%?

  5. $1,000,000 DISCOUNTED 30 years at 8%?

  6. $1,000,000 DISCOUNTED 40 years at 7%?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

In 2018-2019 season, Adam had a free throw success percentage of 64.2%. Assume that free throw...

Chemistry
1.2K views

Imagine that you are in chemistry lab and need to make 1.00 L of a solution...

Geometry
1.2K views

Every vector of P? is also a vector of P3.Select one:TrueFalseLet W be the set...

Basic Math
1.2K views

Solve the triangle a 9 b 7 and c 10 If a triangle exists find...

Calculus
1.2K views

The figure shows two right circular cones one upside down inside the other The two...

Accounting
1.2K views

CP 91 The following unadjusted accounts are taken from the records of Brown Corp. at...

Accounting
1.2K views

Auditing question ALTINO QUESTION The audit report is the soul...

Accounting
1.2K views

Cost Flow Relationships The following information is available for the first year of operations of...

Accounting
1.2K views

Please show a complete step-by-step solution thank you! Interpreting and Applying Disclosures on...

Accounting
1.2K views

warehouse management control, suppliers, packaging, government regulations,...

Accounting
1.2K views

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $320,000;...

Accounting
1.2K views

On 11/14/21 Your Co. loaned C Co. $7200 on a 8%60 day note. Record the...