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Present Value and Opportunity Cost

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P4-9 Present value calculation Without referring to tables or to the preprogrammed function on your financial calculator, use the basic formula for present value, along with the given opportunity cost, i, and the number of periods, n, to calculate the present value interest factor in each of the cases shown in the accompanying
table. Compare the calculated value to the table value.

Opportunity Number of
Case cost,i periods, n
A 2% 4
B 10 2
C 5 3
D 13 2.

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Solution Summary

This solution shows step-by-step calculations to determine the present value using the appropriate formula that includes opportunity cost and number of periods of Case A to D.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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