c. A series of quarterly payments of $1000 for 25 years is economically equivalent to what present sum, if the quarterly payments are invested at an annual rate of 8%, compounded quarterly? include a non-excel cashflow

c. A series of quarterly payments of $1000 for 25 years is economically equivalent to what present sum, if the quarterly payments are invested at an annual rate of 8%, compounded quarterly? include a non-excel cashflow

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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Concept explainers

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.

Question

c. A series of quarterly payments of $1000 for 25 years is
economically equivalent to what present sum, if the quarterly
payments are invested at an annual rate of 8%,
compounded quarterly?

include a non-excel cashflow

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