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Calculate the present value of $100,000 to be received in 6 months. Use an annual discount rate of 10%. Do not adjust th...

Calculate the present value of $100,000 to be received in 6 months. Use an annual discount rate of 10%. Do not adjust the discount rate to a semi-annual rate. Keep it annual and adjust N to the appropriate value.

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Answer #1

The present value is computed as shown below:

Present value = Future value / ( 1 + r )n

= $ 100,000 / ( 1 + 0.10 )0.5

= $ 95,346.26 Approximately

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