Question

In: Finance

What is the present value of $13,530 that you expect to receivein 7 years? Assume...

What is the present value of $13,530 that you expect to receive in 7 years? Assume an annual discount rate of 5.5%.

Group of answer choices

$10,578.46

$9,301.02

$19,681.81

$18,739.05

Solutions

Expert Solution

Information provided:

Future value= $13,530

Yield to maturity= 5.5%

Time= 7 years

Enter the below in a financial calculator to compute the present value:

FV= 13,530

I/Y= 5.5

N= 7

Press the CPT key and PV to compute the present value.

The value obtained is 9,301.02.

Therefore, the present value is $9,301.02.

Hence, the answer is option b.


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