Exercise 6-5 Using the appropriate interest table, compute the present values of
ID: 2523912 • Letter: E
Question
Exercise 6-5 Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods Your answer is incorrect. Try again. Click here to view factor tables $52,460 receivable at the end of each period for 9 periods compounded at 11%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 458,581) Present value 290471 LINK TO TEXT Your answer is incorrect. Try again. Click here to view factor tables $52,460 payments to be made at the end of each period for 17 periods at 10%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 458,581) Present value 244390Explanation / Answer
1. present value of annuity of receivable at the end of each period for 9 periods @11%
present value of annuity factor = [ 1 - (1+r)^(-n)] / r
=> [ 1 - (1.11)^(-9)] / 0.11
=>0.6090752/0.11
=>5.53705.
now,
present value = $52,460* 5.53705.
=>$290,474.
2nd part.
here,
for calculating present value factor n = 17 , r = 10%
=>present value annuity factor = [ 1 - (1.10)^(-17)] / 0.10
=>0.8021553/0.10
=>8.02155.
present value = $52,460 * 8.02155
=>$420,811