document.write( "Question 982290: what is the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10% and the first payment will be made one year from now? \n" ); document.write( "
Algebra.Com's Answer #603193 by Theo(13342)\"\" \"About 
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you will be discounting the payments at 10% per year.
\n" ); document.write( "the first payment is 1 yeqr from now.
\n" ); document.write( "the second payment is 6 years from now.
\n" ); document.write( "the present value of each of the payments are:
\n" ); document.write( "first payment = 500 / 1.10
\n" ); document.write( "second payment = 500 / 1.10^2
\n" ); document.write( "third payment = 500 / 1.10^3
\n" ); document.write( "fourth payment = 500 / 1.10^4
\n" ); document.write( "fifth payment = 500 / 1.10^5
\n" ); document.write( "sixth payment = 500 / 1.10^6
\n" ); document.write( "add up all of the present values and you get:
\n" ); document.write( "present value of the loan is equal to 2,177.63
\n" ); document.write( "if you put the right number in a financial calculator, it will tell you the same thing.
\n" ); document.write( "here's a financial calculator that you can use.
\n" ); document.write( "http://www.arachnoid.com/lutusp/finance.html
\n" ); document.write( "you would make the following entries:
\n" ); document.write( "present value = 0
\n" ); document.write( "future value = 0
\n" ); document.write( "number of payments = 6
\n" ); document.write( "payment = -500
\n" ); document.write( "interest rate per period, % = 10
\n" ); document.write( "payment at: end
\n" ); document.write( "you would then click on PV and you would get the present value of 2,177.63\r
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