Problema Solution
the present value of $3500 per year for 9 years discounted back at 11% is $
Answer provided by our tutors
Present value, also called "discounted value," is the current worth of a future sum of money or stream of cash flow given a specified rate of return.
PV = ?
FV = $3,500
t = 9 year
r = 0.11 or 11 %
PV = FV/(1 + r)^t
PV = 3500/(1 +0.11)^9
PV = $1,369.24
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the present value of $3500 per year for 9 years discounted back at 11% is $1,369.24.