Present value: The actual or current worth of a future sum of money that is invested refers to the present value. Generally, the present value of an investment will be lesser than its future value or it might remain the same. It is useful to calculate bond yields,
Given scenario: Person RF borrowed $70,000 on March 1, 2015. An accrued interest of 6% plus the amount has to be repaid on March 1, 2025. For retiring the debt, Person RF plans for contributing a debt retirement fund of 5 equal instalments starting March 1, 2020 until next 4 years. 5% returns is being expected to be earned.
To determine the amount to be contributed to retire the debt on March 1, 2025.
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Chapter 6 Solutions
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