Asked by Annie Leishman on Apr 28, 2024
Verified
If the interest rate is 8% and $1 will be paid to you in 3 years,what is the present value of that dollar (to the nearest tenth of a cent)?
Interest Rate
The percentage at which interest is charged or paid on a loan or savings, typically expressed as an annual percentage rate.
Present Value
The immediate value of an upcoming amount of money or a series of cash inflows, based on a set rate of return.
- Master the fundamentals of present value and its calculation method.
Verified Answer
AJ
aysia jonesMay 01, 2024
Final Answer :
Present Value =1(1+r)n=1(1.08)3=79.4 cents \text { Present Value } = \frac { 1 } { ( 1 + r ) ^ { n } } = \frac { 1 } { ( 1.08 ) ^ { 3 } } = 79.4 \text { cents } Present Value =(1+r)n1=(1.08)31=79.4 cents
Learning Objectives
- Master the fundamentals of present value and its calculation method.