Based on a 4% discount rate, what is the 2020 present value of the costs of the three alternatives estimated to accrue over the next 4 years? Assume that costs are assessed (accrued) at the beginning of the year

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A: Finance charges = Total payment made  - Loan amount.

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Q: Fs n were part of a N

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A: c) Computation:

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A: GIVEN, PRESENT VALUE=$1000 future value=$1276.30 n=5

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.