Present value What is the present value of the future amount

(Present value) What is the present value of the future amounts?

a.$800 to be recieved 8 years from now discounted back to the present at 10 percent.

b. $300 to be recieved 7 years from now discounted back to the present at 8 percent.

c. $1,100 to be recieved 13 years from now discounted back to the present at 4 percent.

d. $1,250 to be recieved 5 years from now discounted back to the present at 20 percent

A.) What is the present value of $800 to be recieved 8 years from now discounted back to the present at 10 percent ?

Same process for B, C and D

Present Value= Amount * Present Value of Discounting Factor ( Rate, Time)

a. Present Value= $ 800 * 1/(1.10) ^ 8

= $ 373.21

Hence the correct answer is $ 373.21

b. Present Value = $ 300 * 1/(1.08) ^ 7

= $ 175.05

Hence the correct answer is $ 175.05

c. Present Value = $ 1,100 * 1/(1.04) ^ 13

= $ 660.63

Hence the correct answer is $ 660.63

d. Present Value = $ 1,250 * 1/(1.20) ^ 5

= $ 502.35

Hence the correct answer is $ 502.35