In 1895, the first a sporting event was held. The winners prize money was $ 120 . In 2007, the winners check was $1,170,000. (A) what was the percentage increase per year in the winners check over this period? (B) If the winners prize increases at the same rate, what will it be in 2040?

In 1895, the first a sporting event was held. The winners prize money was $ 120 . In 2007, the winners check was $1,170,000. (A) what was the percentage increase per year in the winners check over this period? (B) If the winners prize increases at the same rate, what will it be in 2040?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 7E

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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.

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