Present Value of Money Flow Each function in Exercise represents the rate of flow of money (in dollars per year) over the given time period, compounded continuously at the given annual interest rate. Find the present value in case.

f (t) = 25,000, 12 years, 10%

Question

Mathematics

Adam Crawford

27 November, 08:58

Present Value of Money Flow Each function in Exercise represents the rate of flow of money (in dollars per year) over the given time period, compounded continuously at the given annual interest rate. Find the present value in case.

f (t) = 25,000, 12 years, 10%

+5

Answers (1)

Know the Answer?

Kenley Zimmerman · Answer 1

The present value is $ 170,350.

Step-by-step explanation:

The present value can be calculated by using simple discounting formula for annuity given below.

PV = CF ((1 - (1+i) ^n) / i)

PV = 25,000 * 6.814 (n=12, i=10%)

PV = $ 170,350

Present Value of Money Flow Each function in Exercise represents the rate of flow of money (in dollars per year) over the given time period, compounded continuously at the given annual interest rate. Find the present value in case.f (t) = 25,000, 12 years, 10%

Present Value of Money Flow Each function in Exercise represents the rate of flow of money (in dollars per year) over the given time period, compounded continuously at the given annual interest rate. Find the present value in case.

f (t) = 25,000, 12 years, 10%