Answered: An investment will pay you $83,000 in…

An investment will pay you $83,000 in five years. Assume the appropriate discount rate is 6.75 percent compounded daily. What is the present value

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 29P

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Question

An investment will pay you $83,000 in five years. Assume the appropriate discount rate is 6.75 percent compounded daily.

What is the present value?

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Expert Solution

Step 1

The concept of time value of money will be used to solve this question.

We need to find the present value and present value can be found by ‘discounting’ the future value.

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