Business Net present value

Determine the present value if $15,000 is to be received at the end of eight years and the...

Question:

Determine the present value if $15,000 is to be received at the end of eight years and the discount rates is 9 percent. How would your answer change if you had to wait six years to receive $15,000?

Present value:

Present value is a part of the time value of money concept. This concept is used to calculate the power of money received today compared with the power of money received in the future.

Answer and Explanation:

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Let us calculate present value with the help of a formula:

{eq}\boldsymbol{PV} = \boldsymbol{\frac{FV}{(1+r)^n}} {/eq}

where,

PV = Present value...

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Learn more about this topic:

How to Calculate Present Value of an Investment: Formula & Examples

from

Chapter 24 / Lesson 15

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