What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $1.00.

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What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $1.00.

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andromache andromache · Answer 1 · 2025-04-11T16:55:53-04:00

Answer:

$5,790

Explanation:

As we know that

Future value = Present value × (1 + rate)^number of years

where,

Present value = $?

Future value = $12,500

Rate = 8%

Number of years = 10 years

So, the present value equal to

= $12,500 ÷ (1 + 0.08)^10

= $12,500 ÷ 2.1589249973

= $5,790

Basically we applied the future value formula so that the present value could come

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2025-04-11T16:55:55-04:00

The present value of $12,500 to be received 10 years from today is $5789.92.

Using this formula

PV = FV / (1+r)^n

Let plug in the formula

PV= $ 12,500 / (1+0.08)^10

PV= $ 12,500 / (1.08)^10

PV= $ 12,500 / 2.1589

PV= $ 5789.92

Inconclusion the present value of $12,500 to be received 10 years from today is $5789.92.

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What is the present value of​ $12,500 to be received 10 years from​ today? Assume a discount rate of​ 8% compounded annually and round to the nearest​ $1.00.

Answer :

Other Questions

What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $1.00.