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3 years ago

Present value (with changing interest rates).

Business

1 answer:

densk [106]3 years ago

6 0

Answer:

present value = $12811.98

present value = $11428.17

present value = $9964.92

Explanation:

given data

injury settlement = $14,000

time = 3 year

opportunity cost = 3%

opportunity cost = 7%

opportunity cost = 12%

solution

we will apply here Present value formula that is

present value = $\frac{future\ value}{(1+r)^t}$ ..............................1

put here value of opportunity cost rate we get

present value = $\frac{14000}{(1+0.03)^3}$

present value = $12811.98

and

present value = $\frac{14000}{(1+0.07)^3}$

present value = $11428.17

and

present value = $\frac{14000}{(1+0.12)^3}$

present value = $9964.92

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Present value​ (with changing interest​ rates).

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