Future Value: It is a value of a present amount on some future date. When present sum increases due to interest rate then that interest plus principle is called as future value. It is calculated by multiply the future value of rupee 1 to the present value. Present value: It is a present date value of an amount that company can receive in future. There is difference in present value and future value due to interest rate. It is calculated by multiply the present value of rupee 1 to the future value. Requirement-1: To Calculate: Present Value. Present Value (A*B) 47,188.64 Following is the calculation of Present value: Interest rate 8% Yearly Receipt (A) 13000 Semi Year 4 Compounding 2 Present value of $1 (B) 3.6299 Present Value (A*B) 47,188.64 Concept Introduction: Future Value: It is a value of a present amount on some future date. When present sum increases due to interest rate then that interest plus principle is called as future value. It is calculated by multiply the future value of rupee 1 to the present value. Present value: It is a present date value of an amount that company can receive in future. There is difference in present value and future value due to interest rate. It is calculated by multiply the present value of rupee 1 to the future value. Requirement-2: To Calculate: Present Value. Present Value (A*B) 45,046.37 Following is the calculation of Present value: Interest rate 12% Yearly Receipt (A) 13000 Semi Year 4 Compounding 2 Present value of $1 (B) 3.4651 Present Value (A*B) 45,046.37 Concept Introduction: Future Value: It is a value of a present amount on some future date. When present sum increases due to interest rate then that interest plus principle is called as future value. It is calculated by multiply the future value of rupee 1 to the present value. Present value: It is a present date value of an amount that company can receive in future. There is difference in present value and future value due to interest rate. It is calculated by multiply the present value of rupee 1 to the future value. Requirement-3: To Calculate: Present Value. Present Value (A*B) 43,057.65 Following is the calculation of Present value: Interest rate 16% Yearly Receipt (A) 13000 Semi Year 4 Compounding 2 Present value of $1 (B) 3.3121 Present Value (A*B) 43,057.65

FINANCIAL ACCT-CONNECT

8th Edition

ISBN: 9781266627903

Author: Wild

Publisher: INTER MCG

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Chapter B, Problem 9E

Chapter B, Problem 12E

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7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY

Solution Summary: The author explains that future value is a present date value of an amount that company can receive in future.

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