Homework SourseFor each of the following compute the present value Present
For each of the following, compute the present value?
Present Value
Years
Interest Rate
Future Value
$
11
5
%
$
18,628
$
3
10
42,817
$
15
13
803,382
$
20
12
660,816
| Present Value | Years | Interest Rate | Future Value | ||||||||||||
| $ | 11 | 5 | % | $ | 18,628 | ||||||||||
| $ | 3 | 10 | 42,817 | ||||||||||||
| $ | 15 | 13 | 803,382 | ||||||||||||
| $ | 20 | 12 | 660,816 | ||||||||||||
Solution
Present value = Future value / (1 + r)n Where, r - Rate of Interest n - Number of years
Using the above formula substituting for r and n suitably we get the following.
| Present Value | Years | Interest Rate | Future Value | |||||||||||
| $ | 10891.41 | 11 | 5 | % | $ | 18,628 | ||||||||
| $ | 32169.05 | 3 | 10 | 42,817 | ||||||||||
| $ | 128453.35 | 15 | 13 | 803,382 | ||||||||||
| $ | 68504.66 | 20 | 12 | 660,816 |
