Using a present value table (Table 6-4 and Table 6-5), calculate the present value for the following: Note: Use the appropriate value(s) from the tables provided and final answers to the nearest whole dollar. Required: a. A car down payment of $10,000 that will be required in two years, assuming an interest rate of 10%. b. A lottery prize of $22.0 million to be paid at the rate of $1,100,000 per year for 20 years, assuming an interest rate of 10%. c. The same annual amount as in part b, but assuming an interest rate of 14%. d. A financing lease obligation that calls for the payment of $34,000 per year for 10 years, assuming a discount rate of 8%. a. Present value b. Present value c. Present value d. Present value
Using a present value table (Table 6-4 and Table 6-5), calculate the present value for the following: Note: Use the appropriate value(s) from the tables provided and final answers to the nearest whole dollar. Required: a. A car down payment of $10,000 that will be required in two years, assuming an interest rate of 10%. b. A lottery prize of $22.0 million to be paid at the rate of $1,100,000 per year for 20 years, assuming an interest rate of 10%. c. The same annual amount as in part b, but assuming an interest rate of 14%. d. A financing lease obligation that calls for the payment of $34,000 per year for 10 years, assuming a discount rate of 8%. a. Present value b. Present value c. Present value d. 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:Using a present value table (Table 6-4 and Table 6-5), calculate the present value for the following:
Note: Use the appropriate value(s) from the tables provided and final answers to the nearest whole dollar.
Required:
a. A car down payment of $10,000 that will be required in two years, assuming an interest rate of 10%.
b. A lottery prize of $22.0 million to be paid at the rate of $1,100,000 per year for 20 years, assuming an interest rate of 10%.
c. The same annual amount as in part b, but assuming an interest rate of 14%.
d. A financing lease obligation that calls for the payment of $34,000 per year for 10 years, assuming a discount rate of 8%.
a. Present value
b. Present value
c. Present value
d. Present value
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