G the year payment 1000 if the disThe furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay forthe furniture in three equal annual end-of-the-year payments of $1,000 each with the first payment to bemade one year from today. If the discount rate is 6%, what is the present value of the furniture payments?5/15 Qsice:183.60000.00833.39673.01SubmitLogged in as Qusai AljabriLogout

Given : 3 annual year payments - $1,000 Discount rate = 6%

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е раут what is the present value of the furniture payments?

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter2: Using Financial Statements And Budgets

Section: Chapter Questions

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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

G the year payment 1000 if the dis
The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for
the furniture in three equal annual end-of-the-year payments of $1,000 each with the first payment to be
made one year from today. If the discount rate is 6%, what is the present value of the furniture payments?
5/15 Qs
ice:
183.60
000.00
833.39
673.01
Submit
Logged in as Qusai Aljabri
Logout

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