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tatyana61 [14]
3 years ago
6

You are purchasing a used car and will make 5 annual payments of $3,500 starting one year from today. If your funds could be inv

ested at 9%, what is the present value of the car? (Round the final answer to the nearest dollar.
Business
1 answer:
bezimeni [28]3 years ago
5 0

Answer:

The Present Value (PV) of the car is $13,614

Explanation:

Computing the Present Value of the car using the excel formula of Present Value which is as:

=PV(rate,nper,PMT,fv,type)

where

rate is 9%

nper is number of years is 5

PMT is annual payments which is of -$3,500

FV is Future value which is not given

Type is 0

Putting the values above:

=PV(9%,5,-3500,0)

= $13,613.78 or $13,614

Therefore, the present value of the car amounts to $13,614

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