For each of the following, compute the present value: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present Value Years 12 4 16 21 Interest Rate 4% 9 12 11 Future Value $ 18,128 42,317 798,382 655,816

For each of the following, compute the present value: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present Value Years 12 4 16 21 Interest Rate 4% 9 12 11 Future Value $ 18,128 42,317 798,382 655,816

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

For each of the following, compute the present value: (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g., 32.16.)
Present Value
Years
12
4
16
21
Interest Rate
4 %
9
12
11
Future Value
$
18,128
42,317
798,382
655,816

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