Present Value of Amounts Due Assume that you are going to receive $450,000 in 10 years. The current market rate of inter
Posted: Wed Jul 06, 2022 6:10 am
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.
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.