ssume that 12 payments of $9,000 each are to be repaid monthly at the end of each onth. The effective monthly interest rate is 1%. What is the present equivalent of th yments? 1. $102,308.65 2. $114,142.53 3. c$101.295.70

ssume that 12 payments of $9,000 each are to be repaid monthly at the end of each onth. The effective monthly interest rate is 1%. What is the present equivalent of th yments? 1. $102,308.65 2. $114,142.53 3. c$101.295.70

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 8E: Cash Flow Amounts R. Lee Rouse borrows 10,000 that is to be repaid in 24 equal monthly installments...

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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

mestion 6/14
ssume that 12 payments of $9,000 each are to be repaid monthly at the end of each
onth. The effective monthly interest rate is 1%. What is the present equivalent of the
ayments?
1. $102,308.65
2. $114.142.53
3. c$101.295.70
4. C$104,101.51
5. NONE
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