Answered

The present value of [tex]$\$[/tex]62,000[tex]$ to be received in 1 year, at 6\% compounded annually, is $[/tex]\qquad[tex]$ (rounded to the nearest dollar). Use the following table, if needed.

Present Value of \$[/tex]1 at Compound Interest

\begin{tabular}{cccccc}
Periods & [tex]$5 \%$[/tex] & [tex]$6 \%$[/tex] & [tex]$7 \%$[/tex] & [tex]$10 \%$[/tex] & [tex]$12 \%$[/tex] \\
\hline
1 & 0.95238 & 0.94340 & 0.93458 & 0.90909 & 0.89286 \\
2 & 0.90703 & 0.89000 & 0.87344 & 0.82645 & 0.79719 \\
3 & 0.86384 & 0.83962 & 0.81630 & 0.75131 & 0.71178 \\
4 & 0.82270 & 0.79209 & 0.76290 & 0.68301 & 0.63552 \\
5 & 0.78353 & 0.74726 & 0.71299 & 0.62092 & 0.56743 \\
6 & 0.74622 & 0.70496 & 0.66634 & 0.56447 & 0.50663 \\
7 & 0.71068 & 0.66506 & 0.62275 & 0.51316 & 0.45235 \\
8 & 0.67684 & 0.62741 & 0.58201 & 0.46651 & 0.40388 \\
9 & 0.64461 & 0.59190 & 0.54393 & 0.42410 & 0.36061 \\
10 & 0.61391 & 0.55839 & 0.50835 & 0.38554 & 0.32197
\end{tabular}



Answer :

GinnyAnswer
To find the present value of \[tex]$62,000 to be received in 1 year at a 6% annual interest rate compounded annually, we need to refer to the present value table provided. From the table, the present value factor for 1 year at a 6% interest rate is 0.94340. This factor helps us determine how much \$[/tex]1 in the future is worth today when considering the given interest rate.

Here are the detailed steps:

1. Identify the Future Value (FV) and Present Value Factor: \\
Future Value (FV) = \[tex]$62,000 \\ Present Value Factor for 1 year at 6% (PVF) = 0.94340 2. Calculate the Present Value (PV): \\ \( PV = FV \times PVF \) \[ PV = 62,000 \times 0.94340 \] 3. Perform the Multiplication: \\ \[ PV = 62,000 \times 0.94340 = 58,490.8 \] 4. Round to the Nearest Dollar: \\ The present value rounded to the nearest dollar is \$[/tex]58,491.

Therefore, the present value of \[tex]$62,000 to be received in 1 year at a 6% interest rate compounded annually, rounded to the nearest dollar, is \$[/tex]58,491.