Compounding-discounting occurs annually-define present value

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Reference no: EM131571065

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

a. An initial $400 compounded for 10 years at 6%.

b. An initial $400 compounded for 10 years at 12%.

c. The present value of $400 due in 10 year at 6%.

d. The present value of $1,845 due in 10 years at 12%.

e. The present value of $1,845 due in 10 years at 6%.

Define present value.

The present value is the value today of a sum of money to be received in the future and in general is less than the future value.

The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.

The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.

The present value is the value in the future of a sum of money to be received today and in general is less than the future value.

The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.

How are present values affected by interest rates?

Reference no: EM131571065

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