A debt payment of $8000 is due in 108 months. If money is worth 6.7% p.a. compounded annually, find the equivalent payments at the times shown below. (a) now (b) in 48 months (d) in 156 (c) in 108 monthsmonths

A debt payment of $8000 is due in 108 months. If money is worth 6.7% p.a. compounded annually, find the equivalent payments at the times shown below. (a) now (b) in 48 months (d) in 156 (c) in 108 monthsmonths

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EA: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

100%

A debt payment of $8000 is due in 108
months. If money is worth 6.7% p.a.
compounded annually,
find the equivalent payments at the times
shown below.
(a) now (b) in
48
months
(c) in (d) in
108
monthsmonths
156

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