An investment will pay you $20,000 in 7 years. The appropriate discount rate is 9 percent...

An investment will pay you $20,000 in 7 years. The appropriate discount rate is 9 percent compounded daily. What is the present value?

Multiple Choice

$10,652.66
$10,972.24
$11,185.30
$10,120.03
$10,940.68

Expert Solution

Present Value = Future Value/[(1+Interest Rate)^Number of Periods] = 20000/[{1+(0.09/365)}^{365*7}] = 20000/[1.00024657^2555] = 20000/1.87746 = $10652.66

jeff jeffy answered 2 years ago

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