Present value of a loan

Business & Finance
Tutor: None Selected Time limit: 1 Day

What is the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10 percent and the first payment will be made one year from now? How would your answer change if the $500 per year occurred for ten years? Please provide the formula that you used.

Aug 16th, 2015

Thank you for the opportunity to help you with your question!

Rate=10%

time=6 yrs

Principal=$500

I=P*R*T/100

500*10*6/100=300

The present value= 500+300=$800

If it occurs $500 for 10yrs=800+(500*10)= $5800

Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 16th, 2015

I had someone else answer it but the answer was incorrect. I was able to contact a tutor at my college and she walked me through it so I have the answer. I tried to withdraw the question but Studypool reposted it. Sorry to have wasted your time. I still am not sure how to withdraw this without it posting again.

Aug 16th, 2015

It's okay, what is the answer please?, I think I haven't gotten it right

Aug 16th, 2015

$2,177.5 for six years and $3,072.5 for ten years.

Aug 16th, 2015

Wauh, thank you

Aug 16th, 2015

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Aug 16th, 2015
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Aug 16th, 2015
Dec 4th, 2016
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