Question

An investment will pay $20,000 at the end of the first year, $30,000 at the end of the second year, and $50,000 at the end of the third year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Determine the present value of this investment using a 10% annual interest rate. (Round your answer to nearest whole dollar.)

Answer 1

Answer:

$80541.

Explanation:

Please find the detailed answer as follows:

The Present value is the present value of a future amount of money or stream of cash flows of a specified rate of return . Please refer to the present value formula .

Present Value = 20000/ (1+.10) ^1 + 30000/ (1+.10) ^2 + 50000/ (1+.10) ^3 = $80540.95 or $80541  .Therefore the correct answer is $80540.95 or $80541.