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Elina [12.6K]
2 years ago
10

You are given:

Business
1 answer:
Dmitry [639]2 years ago
5 0

Answer:

0.087  = 8.7%

Explanation:

Present value of perpetuity given that payment is done at the end of N-year

= present value * ( 1 + i )^n-1

= 169 * ( 1 + i )^n-1  = 100 / i

∴ ( 1 + i )^n-1 = 100 / 169i  ------- ( 1 )

Given that first payment at the end of N years = 2112.50 hence the present value of 2112.50

= 2112.50( 1 + i )^n-1  = 100 / i  + 100/ i^2 --- ( 2 )

(given that the increment is with a difference of 100 ) and N-1 = number of years

next step : Input equation 1 into equation 2

2112.50 i^2 = 169i [ 100i + 100 ]

19350 i^2 = 16900i

∴ i = 16900 / 19350 = 0.086956 ≈ 0.087

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What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?
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The present value of of $6,811 to be received in one year if the discount rate is 6.5 percent  will be $6, 395.31.

What does Present Value mean?

A financial concept that calculates the current value of a future sum of money or stream of cash flows is present value. It's used to compare the relative worth of different amounts of money that aren't available at the same time. The inverse of future value. The sum of future investment returns discounted at a specified rate of return is calculated as the present value of money you expect from future income.

What is Financial concept?

Financial concepts are the fundamental principles and theories of finance, which provide guidance on how to assess and manage financial risks, return, and value. These concepts include the time value of money, diversification, risk-return trade-off, capital budgeting, and portfolio selection. Financial concepts are essential for making sound financial decisions and investments.

The procedure to find an present value:

Present Value = FV/ (1+i)^n

6,811/(1+0.065)^1

6, 395.31

To know more about Present value,

brainly.com/question/15904086

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11 months ago
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Answer:

C) $300 U

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As actual quantity is greater than standard quantity it is unfavorable.

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In a business report, the conclusions present suggestions on how the problem might be solved Group of answer choices True False
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Answer:

False

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