Present value of an annuity Determine the present value of $190,000 to be received at the end of each of 4 years, using an interest rate of 5.5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. Year Present Value First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1 c. Why is the present value of the four $190,000 cash receipts less than the $760,000 to be received in the future? The present value is less due to over the 4 years. ?
Present value of an annuity Determine the present value of $190,000 to be received at the end of each of 4 years, using an interest rate of 5.5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. Year Present Value First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1 c. Why is the present value of the four $190,000 cash receipts less than the $760,000 to be received in the future? The present value is less due to over the 4 years. ?
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
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Transcribed Image Text:Present value of an annuity Determine the present value of $190,000 to be received at the end of each of 4 years, using
an interest rate of 5.5%, compounded annually, as follows: a. By successive computations, using the present value of $1
table in Exhibit 5. Round to the nearest whole dollar. Year Present Value First year $fill in the blank 1 Second Year fill in
the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using
the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. fill in the blank 1 of 1 c. Why
is the present value of the four $190,000 cash receipts less than the $760, 000 to be received in the future? The present
value is less due to over the 4 years.
?
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