Exercise 6-5 Using the appropriate interest table, compute the present values of

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. $54,230 receivable at the end of each period for 7 periods compounded at 12%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, eg. 458,581.) Present value Click here to view factor tables $54,230 payments to be made at the end of each period for 17 periods at 9%. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to 0 decimal places, eg. 458,581.) Present value s ick $54,230 payable at the end of the seventh, eighth, ninth, and tenth periods at 12%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Present value ew Click if you would like to Show Work for this question:Open Show Work

Explanation / Answer

PV = FV/(1+r)^n

PV - Present value

FV - Future value

r - Interest rate

n - no. of periods

1.

PV = 54230/(1+0.12)^1 + 54230/(1+0.12)^2 + 54230/(1+0.12)^3 + 54230/(1+0.12)^4 + 54230/(1+0.12)^5 + 54230/(1+0.12)^6 + 54230/(1+0.12)^7 = 247492.52

PV = $247493

2.

PV = 54230/(1+0.09)^1 + 54230/(1+0.09)^2 + 54230/(1+0.09)^3 + 54230/(1+0.09)^4 + 54230/(1+0.09)^5 + 54230/(1+0.09)^6 + 54230/(1+0.09)^7 + 54230/(1+0.09)^8 + 54230/(1+0.09)^9 + 54230/(1+0.09)^10 + 54230/(1+0.09)^11 + 54230/(1+0.09)^12 + 54230/(1+0.09)^13 + 54230/(1+0.09)^14 + 54230/(1+0.09)^15 + 54230/(1+0.09)^16 + 54230/(1+0.09)^17 = 463321.13

PV = $463321

3.

PV = 54230/(1+0.12)^7 + 54230/(1+0.12)^8 + 54230/(1+0.12)^9 = 65989

PV = $65989

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