Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value. To calculate: The present value of $200,000 (Future amount).

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Answer 1

Question

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

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Present Value of an Annuity Determine the present value of $110,000 to be received at the end of each of four years, using an interest rate of 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. b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.

Present Value of an Annuity Determine the present value of $340,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.

Answer 2

Question

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

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Answer 3

Question

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

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Answer 4

Question

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

Answer 6

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

Answer 7

Chapter 14, Problem 14.18EX

(a)

To determine

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

Answer 8

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

Answer 9

(b)

To determine

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

Answer 10

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

Answer 11

(c)

To determine

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value. To calculate: The present value of $200,000 (Future amount).

Solution Summary: The author calculates the present value of 200,000 (future amount) by using a table in Exhibit 10.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

To calculate: The present value of $200,000 (Future amount).

To calculate: The present value of $200,000 (Future amount) by using present value table in Exhibit 10.

To explain: The reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

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Chapter 14 Solutions