present value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Following is a table for the present value of $1 at compound interest:
|
Year |
6% |
10% |
12% |
|
1 |
0.943 |
0.909 |
0.893 |
|
2 |
0.890 |
0.826 |
0.797 |
|
3 |
0.840 |
0.751 |
0.712 |
|
4 |
0.792 |
0.683 |
0.636 |
|
5 |
0.747 |
0.621 |
0.567 |
Following is a table for the present value of an annuity of $1 at compound interest:
|
Year |
6% |
10% |
12% |
|
1 |
0.943 |
0.909 |
0.893 |
|
2 |
1.833 |
1.736 |
1.690 |
|
3 |
2.673 |
2.487 |
2.402 |
|
4 |
3.465 |
3.170 |
3.037 |
|
5 |
4.212 |
3.791 |
3.605 |
Using the tables provided, the present value of $15,000 to be received at the end of each of the next 2 years, assuming an earnings rate of 6%, is
Group of answer choices
$27,495
$26,040
$30,000
$25,350
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