00:01
Okay, so for this question, we need, what is the present value of $800 to be received at the end of eight years, assuming the following annual interest rates? and then we're given these four interest rates to work with.
00:17
So we're going to use our present value equation right here, and we're going to put our numbers into this equation.
00:25
For part a, we're going to do 4%, so that's going to give us a rate of 0 .04.
00:32
When we put these numbers into our equation, it's going to give us a value of, we've got $584 .55.
00:48
So that is going to be your answer for part a.
00:52
For part b, we're doing the same thing.
00:55
It's just going to be discounted annually at 8%.
00:59
So it's going to give us a rate of 0 .08.
01:02
So we're going to go ahead and put these into the same equation that we had for the last part.
01:20
We're going to do this for eight years, which when you calculate that in your calculator is going to give us an answer of $432 .22.
01:35
Now for part c, we're going to be working with 20%, but this, we're going to be working with 20%, but this is discounted quarterly.
01:42
So we're going to have a couple extra steps because we no longer know our rate or our end number...