Answered: hat is the present value of $3,000…

hat is the present value of $3,000 received a. 10 years from today if the interest rate is 4% per year? b. 20 years from today if the interest rate is 8% per year?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

What is the present value of

$3,000

received

years from today if the interest rate is

per year?

years from today if the interest rate is

per year?

Question content area bottom

Part 1

a. The present value is

$enter your response here.

(Round to the nearest cent.)

b. The present value is

$enter your response here.

(Round to the nearest cent.)

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