What is the present value of $1,200 due in 14 years at a 5 percent interest rate and 11 percent interest rate? Do not round intermediate calculations. Round your answers to the nearest cent. Present value at 5%: $ Present value at 11%: $ Explain why the present value is lower when the interest rate is higher. The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future. The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future. The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
What is the present value of $1,200 due in 14 years at a 5 percent interest rate and 11 percent interest rate? Do not round intermediate calculations. Round your answers to the nearest cent. Present value at 5%: $ Present value at 11%: $ Explain why the present value is lower when the interest rate is higher. The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future. The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future. The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter4: Managing Your Cash And Savings
Section: Chapter Questions
Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...
Related questions
Question
What is the present value of $1,200 due in 14 years at a 5 percent interest rate and 11 percent interest rate? Do not round intermediate calculations. Round your answers to the nearest cent.
Present value at 5%: $
Present value at 11%: $
Explain why the present value is lower when the interest rate is higher.
- The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
