Briet Fxercise G Your anawer Is pa tially corret Try gain Fo

Briet Fxercise G Your anawer Is pa tially corret. Try gain (For calculetion purposes, use 5 decimef places as displayed in the factor table provided) (a) what is the present value of?25,900 duc 11 pencds from now, discounted at 10967 (Round answer to 2 decins, places, e.g. 25.25.) Fresent valuc b) what Is the present value or $25,000 to be received at the end or each ct 7 periods, dscounted at 4%7 (R?nd answer to 2 decimal ptscos, ao. 25.25.) Fresent value

Solution

Answer to Part b:

Future Value = Present Value * (1 + r) ^ n
Future Value = $25,900
Rate = 4%
Time (n) = 7 terms

$25,900 = Present Value * (1 + 0.04) ^ 7
$25,900 = Present Value * 1.04^ 7
$25,900 = Present Value * 1.31593
Present Value = 25,900 / 1.31593
Present Value = $19,681.90