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    Calculation of the Present Value

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    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

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    Solution Summary

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