You are scheduled to receive $10,000 in two years. When you receive it, you will invest it for six more years at 6.8 percent per year. How much will you have in eight years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

You are scheduled to receive $10,000 in two years. When you receive it, you will invest it for six more years at 6.8 percent per year. How much will you have in eight years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 1QTD

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Question

You are scheduled to receive $10,000 in two years. When you receive it, you will invest it for six more years at 6.8 percent per year. How much will you have in eight years?

Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

Expert Solution

Step 1

Present value means today's value of the future value of money. It means that the present time received is more valuable as compared to the value received in the future.

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