
(a)
Calculate the present value.
(a)

Explanation of Solution
The present value (PV) can be calculated using the formula given below:
Here
i is the interest rate.
n is the number of years in the future.
Since
Thus, PV is $84,680.28.
Present value: The present value measures the value today of a future cash flow or a series of cash flows.
(b)
Calculate the present value.
(b)

Explanation of Solution
Since
Thus, PV is $640,279.3.
(c)
Calculate the present value.
(c)

Explanation of Solution
Since
Thus, PV is $431,329.8.
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Chapter 16 Solutions
Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List)
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