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The present value of $20,000 (rounded to the nearest dollar) to be received two years from today, assuming an earnings rate of 12% is:
We are given the Future Value and we have to find the Present Value. To find the Present Value, we ...
The solution explains how to calculate the present value given the future value
Calculating Present Values
You just won the TVM Lottery. You will receive $1milliion today plus another 10 annual payments that increase by $400,000 per year. Thus, in one year, you receive $1.4 million. In two years you get 1.8 million, and so on. If the appropriate interest rate is 9 percent, what is the present value of your winnings?View Full Posting Details