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QUESTION

There is a problem in the book: What is the present value of: a . $9,000 in 7 years at 8 percent? b .$20,000 in 5 years at 10 percent?

There is a problem in the book:

What is the present value of:

a.     $9,000 in 7 years at 8 percent? b.$20,000 in 5 years at 10 percent?

c.     $10,000 in 25 years at 6 percent? d.$1,000 in 50 years at 16 percent?

9-2.            Solution:

Appendix B

PV = FV × PVIF

a.   $9,000 × .583 =$5,247

b.   $20,000 × .621 =$12,420

c.   $10,000 × .233 =$2,330

d.   $1,000 × .001 =$1

How are they getting that middle decimal number? How is that being calculated?