Question Content AreaWhat is the present value of $8,000 to be received at the end of 6 years if the required rate of return is 15%?Following is a table for the present value of $1 at compound interest:Year15%10.87020.75630.65840.57250.49760.43270.37680.32790.28410 0.247Following is a table for the present value of an annuity of $1 at compound interest:Year15%10.87021.62632.28342.85553.35363.78574.16084.48794.77210 5.019

Present Value Means The Current Value Of Money Received In The Future, At a Specified Rate Of…

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What is the present value of $8,000 to be received at the end of 6 years if the required rate of return is 15%? Follow

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

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Question Content Area

What is the present value of $8,000 to be received at the end of 6 years if the required rate of return is 15%?

Following is a table for the present value of $1 at compound interest:

Year	15%
1	0.870
2	0.756
3	0.658
4	0.572
5	0.497
6	0.432
7	0.376
8	0.327
9	0.284
10	0.247

Following is a table for the present value of an annuity of $1 at compound interest:

Year	15%
1	0.870
2	1.626
3	2.283
4	2.855
5	3.353
6	3.785
7	4.160
8	4.487
9	4.772
10	5.019

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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