Question

In: Finance

Use a financial calculator or computer software to answer the following questions: a. What is the...

Use a financial calculator or computer software to answer the following questions:

a. What is the present value of $450,000 that is to be received at the end of 20 years if the discount rate is 10%?

b. How would your answer change in (a) if the $450,000 is to be received received at the end of 15 years?

Solutions

Expert Solution

a)

Hence, Present value is $66,889.63

b)

Hence, Present value increased by $40,836.79 ($107,726.42-$66,889.63)


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