Answered: Using a 15% MARR, $10,000 is equivalent…

Using a 15% MARR, $10,000 is equivalent to all of the following except: O a. $8,696 one year ago O b. $11,500 one year in the future O c. $8,116 two years ago O d. $13,225 two years in the future

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

Using a 15% MARR, $10,000 is equivalent to all of the following except:
O a. $8,696 one year ago
O b. $11,500 one year in the future
O c. $8,116 two years ago
O d. $13,225 two years in the future

Expert Solution

Step 1

To solve this question, we have to calculate the equivalent value of $10,000 one year ago, two year ago, one year in the future, and two years in the future.

i or MARR =15%

The formula for the time value of money:

$F = P {(1 + i)}^{n}$

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