Present value : This is the amount of future value reduced or discounted at a rate of interest till particular current date. Formula to compute present value: Present value } = { Future value × Present value factor of $1 at interest rate for time periods } To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

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Answer 1

Question

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

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(b) What is the present value of $30,700 to be received at the end of each of 5 periods, discounted at 10%? (Round answer to 2 decimal places, e.g. 25.25.)

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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?

Answer 2

Question

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

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Answer 3

Question

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

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Answer 4

Question

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

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Answer 5

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

Answer 6

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

Answer 7

Chapter A, Problem A.8BE

(a)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 to be paid after 9 years, if discounted at 10%

Answer 8

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

Answer 9

(b)

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

Presentvalue} = {Future value × Present value factor of $1 at interest rate for time periods}

To determine: The present value of $25,000 received annually at the end of 6 years each, if discounted at 9%.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. A - Prob. A.1BE Ch. A - Kor each of the following cases, indicate (a) what...Ch. A - Liam Company signed a lease for an office building...Ch. A - Prob. A.4BE Ch. A - Prob. A.5BE Ch. A - Prob. A.6BE Ch. A - For each of the following cases, indicate (a) what...Ch. A - Prob. A.8BE Ch. A - Prob. A.9BE Ch. A - Prob. A.10BE

Solution Summary: The author calculates the present value of 25,000 to be paid after 9 years, if discounted at 10%.

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