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Colt1911 [192]
3 years ago
6

39. You expect to receive $5,000 in 25 years. How much is it worth today if the discount rate is 5.5%?

Business
1 answer:
ivann1987 [24]3 years ago
6 0

Answer:

PV= $1,311.17

Explanation:

Giving the following information:

Future Value (FV)= $5,000

Number of periods (n)= 25 years

Interest rate (i)= 5.5% compounded annually

T<u>o calculate the present value (PV), we need to use the following formula:</u>

<u></u>

PV= FV / (1+i)^n

PV= 5,000 / 1.055^25

PV= $1,311.17

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