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(a)
Calculate the present value.
(a)
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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)
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Explanation of Solution
Since
Thus, PV is $640,279.3.
(c)
Calculate the present value.
(c)
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Explanation of Solution
Since
Thus, PV is $431,329.8.
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Chapter 29 Solutions
Economics (MindTap Course List)
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