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What is the present value of $2,500 per year for 9 years discounted back to the present at 9 percent? Q) The present value of $2,500 per year for 9 years discounted back to the present at 9 percent is $__? Round to the nearest cent
What is the present value of $2,500 per year for 9 years discounted back to the present at 9 percent?
Q) The present value of $2,500 per year for 9 years discounted back to the present at 9 percent is $__? Round to the nearest cent.
Expert Solution
Calculation of Present Value
Present Value = Future Value/(1+r)^n
= $2500/(1+0.09)^9
= 2500/(1.09)^9
Using the present value annuity table of 9% for 9 years, we get the value of (1.09)^9
= 2500/2.172
???= 1,151.01
So, Present Value = $1,151
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