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Chapter 4: Question: (page 281)

b. Would the present value of the funds in part a be enough to buy a $2,900 concert ticket?

Short Answer

Expert verified

Answer

No, the present value is not enough to buy the concert ticket.

Step by step solution

01

Meaning of present value

The present value of a future sum refers to the worth of the sum today that is to be received or paid at some point of time in future.

02

Present value (PV)

The present value of the funds is $2,747.78 which is lower than the required fund to buy the concert ticket, $2,900. This is why the present value is insufficient for purchasing the ticket.

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Most popular questions from this chapter


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