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What is present value of $20,000 at 7% compounded monthly for 3 years.
a. $1,750.71
b. $16,221.58
c. $19,654.04
d. $24,658.51Please provide with the workings.
Many Thanks
Profits that are lost by moving an input from one use to another are referred to as:
a. out-of-pocket costs.
b. cannibalization charges.
c. replacement costs.
d. opportunity costs.The monthly interest is 7%/12 = 0.583333% (0.0058333)
The discount factor for 36 months is 1 / ((1.0058333)^36
So the answer is B
(Are you sure that the question asks for present value? Because the way it is worded otherwise makes it sound like the terminal value, which would mean multiplying by (1.0058333)^36 and would then give the answer D)
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