Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below. Pr e s e n t v a l u e = F u t u r e v a l u e × 1 ( 1 + int e r e s t r a t e ) t i m e p e r i o d Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n). Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below. F u t u r e v a l u e = Pr e s e n t v a l u e × ( 1 + int e r e s t r a t e ) t i m e p e r i o d Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n). To determine: The amount to be paid now for the given investment.

Question

Want to see the full answer?

Answer 1

Question

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Financial accounting question

What is the amount of the gain or loss on this transaction

What is karan financial services net income?

Answer 2

Question

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Answer 6

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Answer 7

Chapter B, Problem 4QS

To determine

Introduction:

Present value: The present value of a future amount is the worth of the future amount in the present time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The present value of a future amount is calculated by discounting back the future amount to the present, considering the discount rate and the time period for which the amount is discounted as shown below.

$\Pr e s e n t v a l u e = F u t u r e v a l u e \times \frac{1}{{(1 + int e r e s t r a t e)}^{t i m e p e r i o d}}$

Without applying this formula, the present value is calculated by using the present table. Here, present value is calculated by multiplying the future amount with the present discount factor. The present discount factor depends on the discount rate (i) and the time period (n) and it is found from the present table. The present table provides present discount factor for different values of the discount rate (i) and the time period (n).

Future value: The future value of a present amount is the worth of the present amount in the future time. The value of an amount today is not the same as the amount tomorrow or in some future date. The worth /value of an amount changes with time as the amount has a time value. The future value of a present amount is calculated by considering the discount rate/interest rate and the time period for which the amount is discounted as shown below.

$F u t u r e v a l u e = \Pr e s e n t v a l u e \times {(1 + int e r e s t r a t e)}^{t i m e p e r i o d}$

Without applying this formula, the future value is calculated by using the future table. Here, future value is calculated by multiplying the present amount with the future discount factor. The future discount factor depends on the discount rate (i) and the time period (n) and it is found from the future table. The future table provides future discount factor for different values of the discount rate (i) and the time period (n).

To determine:

The amount to be paid now for the given investment.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. B - Prob. 1QS Ch. B - Interest rate on an investment P1 Ken Francis is...Ch. B - Prob. 3QS Ch. B - Prob. 4QS Ch. B - Prob. 5QS Ch. B - Prob. 6QS Ch. B - Prob. 7QS Ch. B - Prob. 1E Ch. B - Prob. 2E Ch. B - Prob. 3E

Concept explainers

Want to see the full answer?

Chapter B Solutions