Problem 5-7 Present Values (LO3) Calculate the present value of an annual paymen
ID: 2714688 • Letter: P
Question
Problem 5-7 Present Values (LO3)
Calculate the present value of an annual payment of $1,000 you would received for 10 years if the interest rate is 5%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Calculate the present value of an annual payment of $800 you would received for 15 years if the interest rate is 5%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Calculate the present value of an annual payment of $1,000 you would received for 10 years if the interest rate is 20%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Calculate the present value of an annual payment of $800 you would received for 15 years if the interest rate is 20%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a-1.Calculate the present value of an annual payment of $1,000 you would received for 10 years if the interest rate is 5%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Explanation / Answer
a1. $7721.73
a2.$8303.73
a3. $800 for 15 Years as the PV is higher
b1.$4192.47
b2.$3740.38
b3. $1000 a year for 10 years, PV is more than the other one.