Below is a table for the present value of $1 at Compound interest.Year6%10%12%10.9430.9090.89320.8900.8260.79730.8400.7510.71240.7920.6830.63650.7470.6210.567Below is a table for the present value of an annuity of $1 at compound interest.Year6%10%12%10.9430.9090.89321.8331.7361.69032.6732.4872.40243.4653.1703.03754.2123.7913.605Using the tables above, what would be the present value of $19,670 (rounded to the nearest dollar) to be received 4 years from today, assuming an earnings rate of 10%?a. $62,354b. $19,670c. $15,579d. $13,435

Present value calculation involves determining the current worth of a future cash flow by discounting it at a specific interest rate. It helps assess the current value of future sums, aiding financial decision-making and investment evaluation.Step 1:- Identification of the relevant factor. At the "Present Value of $1 at Compound Interest" table for the 10% interest rate and 4-year period. The factor is 0.683.Now Calculation:-Present value = Factor * Future value Present value = 0.6830 * $19,670Present value ≈ $13,435.04 = $13,435.Therefore, the present value of $19,670 to be received 4 years from today at an earnings rate of 10% is approximately $13,435.Hence, the correct answer is option d. $13,435

Answered: Using the tables above, what would be…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Below 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

Below 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 above, what would be the present value of $19,670 (rounded to the nearest dollar) to be received 4 years from today, assuming an earnings rate of 10%?

a. $62,354

b. $19,670

c. $15,579

d. $13,435

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