Question

Below is a table for the present value of $1 at compound interest.

Year 6% 10% 12%

1 0.943 0.909 0.893

2 0.890 0.826 0.797

3 0.840 0.751 0.712

4 0.792 0.683 0.636

5 0.747 0.621 0.567

Below is a table for the present value of an annuity of $1 at compound interest.

Year 6% 10% 12%

1 0.943 0.909 0.893

2 1.833 1.736 1.690

3 2.673 2.487 2.402

4 3.465 3.170 3.037

5 4.212 3.791 3.605

Using the tables above, what would be the present value of $30,000 to be received 3 years from today, assuming an earnings rate of 6%?

a.$23,760 b.$80,190 c.$26,700 d.$25,200

Answer 1

CACLULATION OF THE PRESENT VALUE
Years	Cash Flow	PVF @ 6 % (B)	Present Value (A XB)
0		1.000	$                        -
1		0.943	$                        -
2		0.890	$                        -
3	$     30,000.00	0.840	$               25,200
Net Present Value		$               25,200
Answer = Option D = $ 25,200