eBook What is the present value of a security that will pay $37,000 in 20 years if securities of equal risk pay 11% annually? Do not round intermediate calculations. Round your answer to the nearest cent.

eBook What is the present value of a security that will pay $37,000 in 20 years if securities of equal risk pay 11% annually? Do not round intermediate calculations. Round your answer to the nearest cent.

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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What is the present value of a security that will pay $37,000 in 20 years if securities of equal risk pay 11% annually? Do not round intermediate calculations. Round your
answer to the nearest cent.
2$

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Step 1

Discount Factor:

Discount Factor is a determinant that finds out the present value of future cash flows. Discounting is the main factor that is used in discounting the flow cash. Discount Factor is computed by aggregating the discount rates to one and raising the rate to present value compounded for the number of periods.

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