EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 4, Problem 5PROB
Summary Introduction
The
Present value is the current value of future investment or series of future payments at a predetermined interest rate for a specified period.
Here,
The present value is “PV”.
The future value is “FV”.
The interest rate is “r”.
The maturity period of time period is “n”.
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What is the present value of $25,000 to be received in 15 years at an (A) 6.2% interest rate and (B) 9.6% interest rate? Explain why the present value is lower when the interest rate is higher.
What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b) 9.6 percent rate? Explain why the present value is lower when the interest rate is higher?
a. What is the present value of 15 annual payments of $100, with
the first payment one year from now, if the discount rate is 0.05?
b. What is the present value of 15 annual payments of $100, with
the first payment right now, if the discount rate is 0.05?
c. What is the present value of 15 annual payments of $100, with
the first payment five years from now, if the discount rate is 0.05?
d. At what discount rate would the present value of 15 annual
payments of $100, with the first payment right now, be 0?
e. How many annual payments of $100, with the first payment
right now, would it take to be worth more than $1,000, if the
discount rate is 0.05?
f. What is the value of 15 annual payments which begin at $100
one year from now and increase at 2% per year thereafter, if the
discount rate is 0.05?
Chapter 4 Solutions
EBK CFIN
Ch. 4 - Prob. 1PROBCh. 4 - Prob. 2PROBCh. 4 - Prob. 3PROBCh. 4 - Prob. 4PROBCh. 4 - Prob. 5PROBCh. 4 - Prob. 6PROBCh. 4 - Prob. 7PROBCh. 4 - Prob. 8PROBCh. 4 - Prob. 9PROBCh. 4 - Prob. 10PROB
Ch. 4 - Prob. 11PROBCh. 4 - Prob. 12PROBCh. 4 - Prob. 13PROBCh. 4 - Prob. 14PROBCh. 4 - Prob. 15PROBCh. 4 - Prob. 16PROBCh. 4 - Prob. 17PROBCh. 4 - Prob. 18PROBCh. 4 - Prob. 19PROBCh. 4 - Prob. 20PROBCh. 4 - Prob. 21PROBCh. 4 - Prob. 22PROBCh. 4 - Prob. 23PROBCh. 4 - Prob. 24PROBCh. 4 - Prob. 25PROB
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