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Lady_Fox [76]
3 years ago
13

An investment will pay $200 at the end of each of the next 3 years, $300 at the end of Year 4, $500 at the end of Year 5, and $8

00 at the end of Year 6. If other investments of equal risk earn 5% annually, what is its present value? Round your answer to the nearest cent. $ 2255.30 What is its future value? Round your answer to the nearest cent. $ 3022.32
Business
1 answer:
pantera1 [17]3 years ago
8 0

Answer:

Present value = $1,780.20

Future value = $2,385.64

Explanation:

Years     Annual cash flows   Discount factor @5%       Present value

1              $200.00                  0.9523809524             $190.48

2             $200.00                  0.9070294785             $181.41

3             $200.00                  0.8638375985              $172.77

4             $300.00                  0.8227024748              $246.81

5             $500.00                  0.7835261665               $391.76

6             $800.00                  0.7462153966               $596.97

Present value                                                         $1,780.20

Now the future value is

Future value = Present value × (1 + interest rate)^number of years

= $1,780.20 × (1 + 0.05)^6

= $1,780.20 × 1.3400956406

= $2,385.64

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On Oct 15

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6 0
3 years ago
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Answer:

Denominator

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We can see that if the denominator is lower which means that either population decreases or remains constant when the GDP has increased then the the growth in the per capita GDP will be higher because minute increases in the GDP will increase the answer with significant percentages.

4 0
3 years ago
Read 2 more answers
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Answer:

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