Present Value of Amounts Due Assume that you are going to receive $450,000 in 10 years. The current market rate of inter

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answerhappygod
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Present Value of Amounts Due Assume that you are going to receive $450,000 in 10 years. The current market rate of inter

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Present Value of Amounts Due
Assume that you are going to receive $450,000 in 10 years. Thecurrent market rate of interest is 12%.
a. Using the present value of $1 tablein Exhibit 5, determine the present value of this amountcompounded annually. Round to the nearest whole dollar. $fill in the blank 1
b. Why is the present value less than the$450,000 to be received in the future?The present value is less due to
deflationinflationthe compounding of interestdeflation
over the 10 years.
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