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Calculation of the Present Value

1. Income from a precious metals mining operation has been decreasing uniformly for 5 years. If income in year 1 was $100,000 and it decreased by $10,000 per year through year 5, the present worth of the income at 10% per year is closest to?

A. $310,500
B. $352,200
C. $379,100

2. Income from sales of a certain oil additive has been averaging $100,000 per year. At an interest rate of 18% per year, the present worth of the income for 5 years is closest to?

A. $312,700
B. $328,400
C. $335,100

Solution Summary

The solution includes an excel file that shows the calculations necessary to arrive at the present value of an investment.

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