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Popular Word Problems >

you receive 120 dollars at the end of the year for the next 3 years, if the interest rate is 9 percent what is the present value of these cash flows

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Solution

youreceive120dollarsattheendoftheyearforthenext3years,iftheinterestrateis9percentwhatisthepresentvalueofthesecashflows

Solution

Principal:94.49
Solution steps
Translate the problem into an equation:120=P(1+0.09⋅3)
Solve for P,120=P(1+0.09⋅3):P=94.49
Principal:94.49

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