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    Present Value

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    Jean will receive $8,500 per year for the next 15 years from her trust. If a 7% interest rate is applied, what is the current value of the future payments? Describe how you solved this problem, including which table (for example, present value and future value) was used and why?

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    The current value of future payments is determined with present value tables. These tell us how much money in the future is worth today. As interest rates increase, the value of future payments declines. This is because money today could be invested at this ...

    Solution Summary

    Present Value calculations are examined.