At an interest rate of 7%, what must be the present value of $10,000 due in...

At an interest rate of 7%, what must be the present value of $10,000 due in 8 months?

Solutions

Expert Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.[8 months=8/12 years]

10,000=P*(1+0.07)^(8/12)

P=10,000/(1+0.07)^(8/12)

=10,000*0.955896375

=$9558.96(Approx)

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Find the present value of $10,000 due at the end of 7 years if: (a) The...

Find the present value of $10,000 due at the end of 7 years if: (a) The nominal annual interest rate is 6% compounded semi annually. (b) The nominal annual interest rate is 4% compounded monthly.

What is the present value of an annuity due that makes 5 payments of $6,000 each if the interest rate is 7%?

What is the present value of an annuity due that makes 5 payments of $6,000 each if the interest rate is 7%?a. $20,323.27b. $24,601.18c. $26,323.27d. $28,001.22e. $28,599.24

What is the present value of a $100-payment, 100-year annuity due if the interest rate is...

What is the present value of a $100-payment, 100-year annuity due if the interest rate is 14% per year? What is the future value of a $50-payment, 50-year annuity due if the interest rate is 9% per year?

Problem 2.1 Calculate the present value of $10,000 due in 7 months using 6% p.a. simple...

Problem 2.1 Calculate the present value of $10,000 due in 7 months using 6% p.a. simple interest. Problem 2.2 A note with a maturity value of $100,000 was purchased 46 days before maturity for $99,218.63. Calculate the rate of simple interest p.a. used. Problem 2.3 Calculate the present (discounted) value at 5% p.a. payable monthly of $1,000. (a) due at the end 4 years, (b) due at the end 6 years. Problem 2.4 If j4 = 5:8% calculate (a)...

8. What is the future value of an imvestment of $10,000 with an interest rate of...

8. What is the future value of an imvestment of $10,000 with an interest rate of 6% per year, compounded daily (365 days), for 9 years.

What is the present value of a $600 perpetuity if the interest rate is 4%? If...

What is the present value of a $600 perpetuity if the interest rate is 4%? If interest rates doubled to 8%, what would its present value be? Round your answers to the nearest cent. -Present value at 4%: $ -Present value at 8%: $

7- Compute the present value for the following: Future Value: 140987 Years: 26 Interest rate: 11...

7- Compute the present value for the following: Future Value: 140987 Years: 26 Interest rate: 11 Provide answer with two decimals, i.e. 32.16) 8- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 2,589 FV: 80,008 Rate:8% # Years: 9- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 2,555 FV: 62,387 Rate:16% # Years: 10- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 3,590 FV: 21,073

What is the internal rate of return, net present value with a 10% interest rate, and...

What is the internal rate of return, net present value with a 10% interest rate, and net present value with a 20% interest rate of this project. The cash flows are as follows: Year 0 - Initial investment - 20,000 (make sure to make investments negative values in Excel cash flow) Year 1 - 8,000 Year 2 - 8,000 Year 3 - 9,000 Year 4- 12,000 No value after year 4.

Assume the appropriate discount rate is 7%. If the present value of this series of payments is $20,000, what must be the amount of each payment?

Today, you begin to receive payments of equal amounts at the beginning of each year for 6 years (including the payment you receive today). Assume the appropriate discount rate is 7%. If the present value of this series of payments is $20,000, what must be the amount of each payment?

What is the present value of $10,000 per year in perpetuity at an annual interest rate of 10 percent if the perpetuity starts in year=4?

What is the present value of $10,000 per year in perpetuity at an annual interest rate of 10 percent if the perpetuity starts in year=4? $10,000 $75,131.48 $1,000 $68,301.35 $82,402.36

Subjects