document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1077224>Question 1077224</A>: <I><SPAN STYLE=\"word-break: break-all;\"> What is the present value of a single cash flow of $25,000 received at the end of 10 years, if we assume a discount rate of 5% annually? With a discount rate of 7% </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #691796 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=691796\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> interest rates are 5% and 7%.\r<BR>\n" );
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document.write( "time period is 10 years.\r<BR>\n" );
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document.write( "interest is compounded annually.\r<BR>\n" );
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document.write( "formula is f = p * (1 + r) ^ n\r<BR>\n" );
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document.write( "r is the interest rate per time period<BR>\n" );
document.write( "n is the number of time periods.<BR>\n" );
document.write( "f is the future value<BR>\n" );
document.write( "p is the present value\r<BR>\n" );
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document.write( "at 5%, your problem formula becomes 25000 = p * (1.05) ^ 10\r<BR>\n" );
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document.write( "at 7%, your problem formula becomes 25000 = p * (1.07) ^ 10\r<BR>\n" );
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document.write( "solve for p in both equations and you get:\r<BR>\n" );
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document.write( "p = 25000 / 1.05 ^ 10 at 5% per year.\r<BR>\n" );
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document.write( "p = 25000 / 1.07 ^ 10 at 7% per year.\r<BR>\n" );
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document.write( "results are:\r<BR>\n" );
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document.write( "p = 15347.83 at 5% per year.\r<BR>\n" );
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document.write( "p = 12708.73 at 7% per year.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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