Calculate the present value of $2,000 for each of the following: interest rate is 12%Show workthe following way: PV factor from the table * $2,000 = Table factor Year 1:Year 3:Year 2:What is the sum of the present values? Why is the present value of anamount to be received in 3 years less than the amount to be received in one year? Calculatethe future value of an annuity of $2,000 to be received over 40 years at 12%.

Step 1:a)We have to calculate the present value of the cash flow.Calculations are shown below: We…

Answered: Calculate the present value of $2,000…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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Calculate the future value of the following annuities, assuming each annuity payment is made at the end of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Annuity Payment Annual Rate Interest Compounded Period Invested Future Value of Annuity 1. $3,100 8.0 % Semiannually 9 years $79,500.77 2. 6,100 10.0 % Quarterly 5 years 3. 5,100 12.0 % Annually 6 years
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