3. s) At an annual effective rate of i, i > 0, the following are equal: (a) the present value of $10,000 at the end of 8 years; (b) the sum of present values of $53,000 at the end of year 2t and $90,000 at the end of year 4t; (c) $7,000 immediately. Calculate the present value of a payment of $10,000 at the end of year t + 4 using the same annual effective interest rate. Solution:

3. s) At an annual effective rate of i, i > 0, the following are equal: (a) the present value of $10,000 at the end of 8 years; (b) the sum of present values of $53,000 at the end of year 2t and $90,000 at the end of year 4t; (c) $7,000 immediately. Calculate the present value of a payment of $10,000 at the end of year t + 4 using the same annual effective interest rate. Solution:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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