If interest is 5% compounded quarterly, calculate the present value of twelve $1,000 monthly payments. Multiple Choice $11,582.52 $11,382.52 $11,782.52 $11,682.52 $11,482.52 Show all the calculation steps and formulas if necessary

If interest is 5% compounded quarterly, calculate the present value of twelve $1,000 monthly payments. Multiple Choice $11,582.52 $11,382.52 $11,782.52 $11,682.52 $11,482.52 Show all the calculation steps and formulas if necessary

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 11E

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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

If interest is 5% compounded quarterly, calculate the present value of twelve $1,000 monthly payments.

Multiple Choice

$11,582.52
$11,382.52
$11,782.52
$11,682.52
$11,482.52

Show all the calculation steps and formulas if necessary

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