Question

Complete the following using present value. (Use the Table provided.) (Do not round intermediate calculations. Round the "PV factor" to 4 decimal places and final answer to the nearest cent.)

Amount desired at end of period	Length of time	Rate	Compounded	On PV Table 12.3		PV factor used	PV of amount desired at end of period
				Period used	Rate used
$18,100	5 years	24%	Quarterly		%		$

Answer 1

Rate = 24% annual

or

= 24/4

= 6% quarterly

Time period = 5 years

or

= 5 x 4

= 20 quarters

Amount desired at end of period	Length of time	Rate	Compounded	On PV Table 12.3		PV factor used	PV of amount desired end of period
				Period used	Rate used
18,100	5 years	24%	Quarterly	20	6%	0.3118	18,100 x 0.3118 = 5,644