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# Step-wise answer to Present Value

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1. Present value calculations. Using a present value table, your calculator, or a computer program present value function, answer the following questions:
a. What is the present value of nine annual cash payments of \$4,000, to be paid at the end of each year using an interest rate of 6%?
b. What is the present value of \$15,000 to be paid at the end of 20 years, using an interest rate of 18%?
c. How much cash must be deposited in a savings account as a single amount in order to accumulate \$300,000 at the end of 12 years, assuming that the account will earn 10% interest?
d. How much cash must be deposited in a savings account (as a single amount) in order to accumulate \$50,000 at the end of seven years, assuming that the account will earn 12% interest?

#### Solution Preview

1 Present value calculations. Using a present value table, your calculator, or a computer program present value function, answer the following questions:
a. What is the present value of nine annual cash payments of \$4,000, to be paid at the end of each year using an interest rate of 6%?

By excel function
Here we have to find ...

#### Solution Summary

This provides the steps to calculate the Present value

\$2.19