Question

For each of the following, compute the present value: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Present Value		Years			Interest Rate				Future Value
$			11			5	%			$	17,828
			3			10					42,017
			15			13					795,382
			20			12					652,816

Answer 1

Present value=Cash flows*Present value of discounting factor(rate%,time period)

a.Present value=17828/1.05^11

=17828*0.584679289

=$10423.66(Approx)

b.Present value=42017/1.1^3

=42017*0.751314801

=$31567.99(Approx)

c.Present value=795382/1.13^15

=795382*0.159890753

=$127174.23(Approx)

d.Present value=652816/1.12^20

=652816*0.103666765

=$67675.32(Approx)