Solution-Compute present value to be received twenty-four

Compute present value to be received twenty-four months

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The present value of $1.00 to be received five years hence is $0.681 at 8 percent interest per year compounded annually. The present value of $1.00 to be received at the end of each of the next five years is $3.993 if the interest rate is 8 percent per year compounded annually. Refer to Tables on pages 10.10 and10.14 to confirm the above statement.

Problem 1: At 8 percent interest per year, compounded annually, compute:

The present value of $100 to be received (24) twenty-four months from now;
The present value of $60 to be received at the end of each of the next (7) seven years;
The combined present value of $50 to be received (1) one year hence; $38 (2) two years hence; and $100 (5) five years hence, with no money being received in the third and fourth years.

Reference no: EM132751123

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Compute present value to be received twenty-four months

Reference no: EM132751123

Reference no: EM132751123

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