Respuesta :
The term "present value" describes the value that a quantity of money or stream of income that will be received at a specific future date now has today.
How to Use a PV Table?
- Different periods are included in the first row and various discount rates are listed in the first column of a PV table or present value table. In order to obtain present value coefficients for a specific discount rate and period, the table does so.
- The time can be expressed in the table as weeks, months, or years. The discount rates typically range from 0% to 20%, with a 0.25%, 0.50%, or 1% interval.
- For instance, a business wants to sell some assets that are now valued at $2000.
- The other side is prepared to provide $2200, but only after a year. The business must determine the current worth of $2200 before deciding whether or not to accept the offer.
- The business uses a 4% discount rate. The 4% for a year coefficient in the sample present value table is 0.9615.
- Now, we can calculate the current value of $2115 by multiplying this coefficient by $2200. It is beneficial to sell the item since its present worth of $2200 is more than its current value.
To learn more about the present value table, refer to the following link:
https://brainly.com/question/22077099
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