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Problem 5-5 Present Value (LG5-3) Compute the present value of a $2,800 deposit in year 3, and another $2,300 deposit at the end of year 5 if interest rates are 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Respuesta :

Answer:

$3788.07

Explanation:

Present value=$2,800

Another year =$2,300

The Present value can be determined by the following formula

=[tex]flows\ of\ cash\ * discounting\ factor\ of\ present \ value[/tex]

[tex]=\frac{=2800}{1.08^{3} } +\frac{2300}{1.08^{3} }[/tex]

=$3788.07

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