Paul Havlik promised his grandson Jamie that he would give him $6,900 5 years from today for graduating from high school. Assume money is worth 6% interest compounded semiannually. What is the present value of this $6,900? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value
Paul Havlik promised his grandson Jamie that he would give him $6,900 5 years from today for graduating from high school. Assume money is worth 6% interest compounded semiannually. What is the present value of this $6,900? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:ezto.mheducation.com/ext/map/index.html?_con%=con&external_browser%3D0&launchUrl=https%253A%252F%252Fblackboard.waketech.edu%252Fwebapps%252Fportal%252Fframeset.jsp%25
Paul Havlik promised his grandson Jamie that he would give him $6,900 5 years from today for graduating from high school. Assume
money is worth 6% interest compounded semiannually.
What is the present value of this $6,900? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to
the nearest cent.)
Present value
Bcer
Transcribed Image Text:ucation.com/Media/Connect_Production/ bne/SlaterL13e/Presen
Present value interest factor of $1 per period at i% for n periods, PVIF(i,n).
Period
0.5%
1.5%
0.9852
1.0%
2.0%
0.9804
0.9612
0.9423
2.5%
0.9756
0.9518
0.9286
0.9060
3.0%
3.5%
0.9662
4.0%
0.9615
4.5%
0.9569
0.9157
0.8763
5.0%
0.9524
0.9070
6.0%
0.9434
5.5%
6.5%
7.0%
7.5%
0.9302
0.8653
0.8050
8.0%
0.9259
0.8573
8.5%
0.9217
0.8495
1.
0.9950
0.9901
0.9709
9.0%
9.5%
10.0%
0.9479
0.8985
0.8516
0.8072
0.9901
0.9803
0.9707
0.9390
0.9346
0.9174
0.9132
0.9091
0.9426
0.9151
0.9335
0.9246
0.8900
0.8396
0.7921
0.7473
0.8817
0.8734
0.8417
0.8340
0.8264
0.9706
0.9610
3.
0.9851
0.9563
0.9422
0.9283
0.8890
0.8548
0.8219
0.7903
0.9019
0.8714
0.8638
0.8227
0.7835
0.7462
0.8278
0.7773
0.9802
0.8163
0.7938
0.7829
0.7722
0.7617
0.7513
0.9238
0.8885
0.8386
0.8025
0.7679
0.9515
0.7629
0.7488
0.7350
0.7216
0.7084
0.6956
0.6830
0.9754
0.9705
0.9057
0.8420
0.8135
0.7860
0.8839
0.8626
0.7651
0.7252
0.7299
0.7130
0.6966
0.6806
0.6650
0.6499
0.6352
0.6209
0.9420
0.8623
0.8880
0.8706
0.8535
0.8375
0.8131
0.7894
0.9145
0.7050
0.6853
0.6663
0.6480
0.6302
0.6129
0.9657
0.5963
0.5801
0.5645
0.9327
0.9235
0.9010
0.8413
0.7599
0.7348
0.7107
0.6874
0.6651
0.6435
0.6227
0.6028
0.5835
0.5470
0.5649
0.5298
0.4838
0.4418
0.4035
0.3685
0.3365
0.5132
8.
0.9609
0.8877
0.8207
0.7594
0.7337
0.7089
0.7307
0.7026
0.7032
0.6768
0.5820
0.6516
0.6176
0.6274
0.6042
0.5607
0,5403
0.5002
0.5207
0.5019
0.4604
0.4224
0.4665
0.9561
0.9143
0.9053
0.8746
0.8368
0.8007
0.7664
0.6729
0.6439
0.6446
0.5919
0.5216
0.4852
0.5674
0.5439
0.4799
0.4241
10
0.9513
0.8617
0.8203
0.7812
0.7441
0.6756
0.6139
0.5854
0.5584
0.5327
0.5083
0.4632
0.4423
0.3855
0.9466
0.9419
0.9372
11
0.8963
0.8489
0.8043
0.7621
0.7224
0.6849
0.6496
0.6162
0.5847
0.5549
0.5268
0.5002
0.4751
0.4513
0.4289
0.3875
0.3555
0.4076
0.3505
12
0.8874
0.8364
0.7885
0.7436
0.7014
0.6618
0.6246
0.5897
0.5568
0.4970
0.4697
0.4440
0.4199
0.3906
0.5260
0.3971
0.3757
0.3186
13
0.8787
0.8240
0.7730
0.7254
0.6810
0.6611
0,6419
0.6394
0.6006
0.5643
0.5303
0.4688
0.4410
0.4150
0.3878
0.4986
0.3677
0.3463
0.2897
0.2633
0.2394
0.2176
0.3262
0.3073
14
0.9326
0.8700
0.7579
0.8118
0.7999
0.7077
0.6178
0.5969
0.5775
0.5400
0.5051
0.4726
0.4423
0.4141
0.3633
0.3405
0.3191
0.2992
0.2745
0.2807
15
0.9279
0.8613
0.7430
0.6905
0.5553
0.5167
0.4479
0.3380
0.3144
0.4810
0.4173
0.3888
0.3624
0.3152
0.2941
0.2563
0.2341
0.7880
0.7764
0.7649
16
0.9233
0.8528
0.7284
0.6736
0.6232
0.5767
0.5339
0.4945
0.4581
0.4246
0.3936
0.3651
0.3387
0.2919
0.2711
0.2519
17
0.9187
0.8444
0.7142
0.6572
0.6050
0.5572
0.5134
0.4732
0.4024
0.3428
0.2311
0.2925
0.2720
0.4363
0.3714
0.3166
0.2703
0.2499
0.2138
0.1978
0.1799
0.9141
0.9096
18
0.7002
0.6412
0.5874
0.5384
0.4936
0.4746
0.8360
0.4528
0.4155
0.3815
0.3503
0.3219
0.2959
0.2502
0.2303
0.2120
0.1952
0.8277
0.7536
0.6864
0.6255
0.5703
0.5202
0.4333
0.3022
0.2531
0.2317
0.1945
0.1783
0.1628
0.1487
19
0.3957
0.3616
0.3305
0.2765
0.2122
0.1635
0.2145
0.1987
0.6103
0.9051
0.9006
0.3427
0.3249
0.3079
20
0.8195
0.7425
0.6730
0.5537
0.5026
0.4564
0.4146
0.3769
0.3118
0.2838
0.2584
0.2354
0.1956
0.1784
0.1486
0.3589
0.3418
0.1637
0.1351
0.2665
0.2502
21
0.6598
0.5954
0.4856
0.4388
0.3968
0.2415
0.2190
0.1803
0.7315
0.7207
0.8114
0.5375
0.2942
0.1228
0.1502
0.1378
0.1264
0.2037
0.1662
0.1358
0.3797
0.3634
0.6468
0.2775
0.2257
0.1839
0.8961
0.8916
22
0.8034
0.5809
0.5219
0.4692
0.4220
0.2109
0.1703
0.1531
0.1412
0.1301
0.1199
0.3256
0.3101
0.1117
0.1015
0.2618
0.2349
0.1895
0.1240
0.5667
0.5529
0.5394
0.5262
23
24
0.6342
0.5067
0.4533
0.4057
0.2919
0.7100
0.6995
0.7954
0.3901
0.2767
0.2206
0.1971
0.1763
0.1577
0.1133
0.6217
0.6095
0.5976
0.8872
0.7876
0.4919
0.4380
0.3477
0.2470
0.1034
0.0945
0.4776
0.3751
0.3327
0.2953
0.2622
0.2330
0.2071
0.1842
0.1640
0.1460
0.1160
0.0923
0.6892
0.6790
25
0.8828
0.7798
0.4231
0.1352
0.1252
0.1159
0.1073
0.1064
0.0976
0.0895
0.7720
0.4637
0.4088
0.3607
0.3184
0.2812
0.2486
0.2198
0.1945
0.1722
0.1525
0.0839
0.8784
0.8740
0.8697
26
0.0763
0.0693
0.1105
0.0863
0.0788
0.1826
0.3047
0.2916
0.1419
0.1320
0.3468
0.2678
0.2356
0.2074
0.1609
0.4502
0.4371
0.5134
0.3950
27
28
0.7644
0.6690
0.5859
0.7568
0.6591
0.5744
0.5009
0.3817
0.3335
0.2551
0.2233
0.1956
0.1715
0.1504
0.1019
0.3207
0.2790
0.2429
0.2117
0.1846
0.1610
0.1406
0.1228
0.0939
0.0822
0.0719
0.0630
0.4243
0.4120
0.4000
0.6494
0.5631
0.4887
0.3687
0.7493
0.7419
29
0.8653
0.8610
0.8567
0.8525
0.8482
0.0754
0.0691
0.0573
0.0521
0.0994
0.0657
0.1142
0.1063
0.0865
0.0797
0.1512
0.1314
0.1228
0.2670
0.2314
0.2006
0.1741
0.3083
0.2965
0.3563
0.4767
0.4651
0.4538
0.4427
30
0.6398
0.5521
0.0600
0.0548
0.3442
0.2555
0.2204
0.1902
0.1643
0.1420
0.0920
0.7346
0.7273
0.7201
31
0.6303
0.5412
0.0474
0.0852
0.0789
0.0735
0.0677
0.0634
0.0582
0.3326
0.2851
0.2445
0.2099
0.1803
0.1550
0.1333
0.1147
0.0988
0.3883
0.3770
0.3660
0.3554
0.3450
0.3350
0.3252
32
0.6210
0.5306
0.1252
0.0500
0.0431
0.1072
0.1002
0.6118
0.5202
0.3213
0.2741
0.2340
0.1999
0.1709
0.1462
0.0919
33
34
0.1175
0.0730
0.0624
0.0534
0.0457
0.0391
0.0855
0.0796
0.2636
0.2239
0.1904
0.1620
0.1379
0.3105
0.3000
0.2898
0.6028
0.5100
0.4319
0.8440
0.8398
0.8356
0.8315
0.8274
0.8232
0.8191
0.8151
0.8110
0.8070
0.7130
0.7059
0.2534
0.2143
0.1813
0.1535
0.1301
0.1103
0.0937
0.0676
0.0575
0.0490
0.0417
0.0356
35
0.5939
0.5000
0.4214
0.0381
0.0323
0.0530
0.0489
0.0626
0.0449
0.1036
0.0973
0.2437
0.2050
0.1727
0.1455
0.1227
0.0875
0.0740
36
0.6989
0.5851
0.4902
0.4111
0.1158
0.0818
0.0688
0.0580
0.0412
0.0348
0.0294
0.1379
0.1307
0.2343
0.1962
0.1644
0.2800
0.2706
0.2614
0.2526
0.2440
0.2358
0.6920
0.4806
0.4011
0.5764
0.5679
37
0.1878
0.1566
0.1092
0.0914
0.0765
0.0640
0.0537
0.0450
0.0378
0.0318
0.0267
0.6852
0.4712
0.3913
0.2253
0.0243
0.0221
38
0.0290
0.0347
0.0318
0.0415
0.0596
0.0554
0.0858
0.0497
0.0715
0.0668
0.1239
0.1031
0.1491
0.1420
0.2166
0.1797
0.3817
0.3724
0.3158
0.3066
0.5595
0.5513
0.5431
0.5351
0.4619
0.6784
0.6717
39
0.0383
0.0265
0.0805
0.0756
0.0460
0.0426
0.2083
0.1719
0.1175
0.0972
0.4529
0.4440
0.4353
40
0.1113
0.0917
0.0624
0.0516
0.0353
0.0292
0.0242
0.0201
0.1353
0.2003
0.1926
41
0.6650
0.3633
0.2976
0.1645
0.0395
0.0325
0.0268
0.0221
0.0183
0.0583
0.0480
0.0865
0.0816
0.0770
0.0710
0.1055
0.1000
0.0948
0.6584
0.3545
0.2890
0.1574
0.1288
0.0202
0.0166
42
0.0365
0.0300
0.0246
0.0545
0.0509
0.0446
0.0415
0.4268
0.3458
0.2805
0.2278
0.1852
0.1507
0.1227
0.0667
0.0226
0.0184
0.0151
43
0.6519
0.5272
0.0626
0.0338
0.0276
0.1169
0.1780
0.1712
0.1646
0.1442
0.2724
0.2644
0.2567
0.2493
0.2420
0.2350
0.2201
0.0137
0.3374
0.3292
0.3211
0.3133
0.3057
0.2982
0.0168
0.5194
0.5117
0.5042
0.4184
0.0207
0.6454
0.6391
44
0.8030
0.0899
0.0727
0.0588
0.0476
0.0386
0.0313
0.0254
0.1380
0.1320
0.4102
0.2127
0.1113
0.0190
0.0154
0.0125
0.0290
0.0269
0.0249
0.0230
45
0.7990
0.0445
0.0359
0.0235
0.0852
0.0807
0.0685
0.0647
0.0610
0.0552
0.0518
0.4022
0.2055
0.1060
0.0216
0.0174
0.0140
0.0113
46
0.7950
0.6327
0.0416
0.0334
0.1009
0.1985
0.1918
0.1853
0.1583
0.1522
0.1263
0.1209
0.0128
0.0117
0.0103
0.0094
0.4967
0.3943
0.0199
0.0160
0.0311
0.0289
47
0.7910
0.6265
0.0389
0.0487
0.0457
0.0765
0.0961
0.0916
0.0872
0.0147
0.0184
0.0169
48
0.7871
0.6203
0.4894
0.3865
0.0725
0.0575
0.0363
0.1157
0.0085
0.1463
0.1407
49
0.7832
0.6141
0.4821
0.3790
0.0429
0.0339
0.0269
0.0213
0.0134
0.0107
0.2909
0.2281
0.1791
0.1107
0.0688
0.0543
50
0.7793
0.6080
0.4750
0.3715
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